How Does Amazon Echo Drive Music Use?
We’ve studied many aspects of Amazon Echo ownership and use. Last month we updated our estimate of Amazon Echo units in use. Previously, we showed how Echo owners spend more at Amazon.com than non Echo owners, and how the principal use of Echo devices remains listening to music.
We return to music listening here. We wondered how, for this most frequent use, Echo ownership influences how owners listen to music. We find that Echo owners subscribe to paid music streaming services more, and to Amazon’s own paid streaming service considerably more.
In 2014, months before introducing the first Echo device, Amazon added Prime Music as a benefit for Amazon Prime members. Prime Music included free streaming from a library of about 2 million songs - far smaller than the libraries of the leading streaming music services. In 2016, Amazon introduced Amazon Music Unlimited as a more direct competitor to the leading paid streaming music services. Amazon Music Unlimited’s 100 million song library and $8.99 monthly fee closely matched the market leaders.
We looked at four major streaming services: Amazon Music Unlimited, Spotify (both free and paid), Apple Music, and Pandora (both free and its paid service, PandoraOne). Echo owners can listen to any of the four services on an Echo device. We did not analyze use exclusively on Echo devices, but rather what streaming music services Echo owners use on any device, including smartphones, tablets, computers, and other electronics.
Among all Amazon customers, streaming music penetration ranges from almost 30% for both the free Pandora and Spotify services to under 5% for PandoraOne (Chart 1). About 10% of Amazon customers pay for either Amazon Music or Apple Music, while 15% pay for Spotify Premium.