Amazon Inc.’s (AMZN) Amazon Music, the No. 3 music-streaming service by subscriptions, plans to catch up and leapfrog rivals Spotify Technology SA (SPOT) and Apple Inc. (AAPL). Its newest initiative to win market share from its bigger rivals is to offer higher quality, high-resolution streaming service for 50 million songs, with digital sound quality similar to CDs. The retail giant views its offering as an alternative that its competitors simply can't match.
Digitization of Music Compromises Quality
While music streaming industry skyrocketed over recent years, currently generating a whopping 80% of all revenue from recorded music, it has its downsides. Many argue that audio quality has suffered at the expense of digitization, particularly with on-demand music streaming. The complaints go back to the 1990’s, in the early days of the MP3 and the widespread adoption of CDs. Music connoisseurs have argued that this big shift in the music industry towards digitization and convenience has decreased overall quality since the vinyl record. As a result of this concern, many customers have shown that they are willing to pay for higher audio quality, and many artists have advocated for such an introduction.
Amazon HD Targets Masses
At $12.99 a month for Prime members and $14.99 a month for non-members, Amazon Music HD offers higher quality than less expensive, lower audio quality services offered by Apple and Spotify. The latter two currently sell their monthly packages at a standard $9.99. Both offer no high-resolution tiers. On the other hand, Amazon’s HD offering is more affordable than comparable services such as one from Tidal, which costs $19.99 a month. It should also be able to reach a larger audience, compared to rival high-quality services that often cater to niche markets, per The Wall Street Journal.
According to Tidal’s most recently disclosed count in 2016, the company had three million subscribers overall, with 45% paying for its HD service. By comparison, at the same time, Spotify said it had 30 million paying subscribers and Apple Music trailed far behind at 11 million, according to the Journal. Now, Spotify and Apple boast 232 million and 56 million users per month, respectively, according to The New York Times. Amazon does not disclose subscriber figures for its music business. However, a Financial Times report in July cited 32 million subscribers to Amazon Music, including Unlimited, its answer to Spotify and Apple Music, and its more limited Prime Music.
“This will be the biggest thing to happen to music since the introduction of digital audio 40 years ago,” said rock legend Neil Young in a statement provided by Amazon. The artist has been championing higher-quality audio since the introduction of digital music, leading him to launch his own HD streaming service last year.
Amazon’s new music streaming offering was made available on Tuesday in the U.S., U.K, Germany, and Japan. The music service includes over 50 million lossless HD audio tracks with a bit depth of 16 bits and a sample rate of 44.1kHz (CD quality).Bit depth and sampling rates reflect the amount of audio information captured in each file.
Amazon HD will also offer millions of tracks that the tech giant says will be in higher quality “Ultra-HD,” up to 24-bit and 192 kHz, the highest resolution files that record companies typically produce. These tracks should be similar to Tidal’s mega-HD “Masters,” which accounts for over 170,00 million audio tracks out of Tidal’s total 60 million audio tracks.
The success of Amazon’s new ultra high definition offering will be decided largely upon the size of a market long thought to be an audiophile niche. Amazon’s higher-cost option must be able to attract masses of people willing to pay 50% more for a higher quality sound. For this to happen, the mega-retailer, which typically targets older consumers and families, must prove that this group of people is made up of more than just music snobs.