Amazon Music passes 55M customers, still lags behind Spotify and Apple

Ingrid Lunden

Amazon Music, the streaming music service from the e-commerce and cloud giant that competes against the likes of Spotify and Apple Music, announced a milestone in its growth today: it has passed 55 million customers across the six different pricing tiers that it offers for the service, ranging from $15 per month through to a free, ad-supported tier.

The numbers represent a strong leap forward for the service, which launched in October 2016. But in the bigger race to tie down consumers making the move to streaming services with recurring subscriptions, Amazon appears still to lag behind Apple Music, which last summer said it passed 60 million paying users (no updated numbers since), and Spotify, which as of last quarter said it had 248 million users globally, 113 million of them paying.

Amazon does not break out how many users are in each of its tiers, although we are asking and will update if we learn more. The overall figure, Amazon said, includes growth of more than 50% of users in the U.S., U.K., Germany and Japan subscribing to Amazon Music Unlimited, which includes HD-quality tracks for about 50 million songs. Other countries without HD-quality where Amazon Music is available include France, Italy, Spain and Mexico, and it notes that customers more than doubled in these four countries. It also recently launched services in Brazil.

"We’re proud to reach this incredible milestone and are overwhelmed by our customers’ response to Amazon Music," said Steve Boom, VP of Amazon Music, in a statement. "Our strategy is unique and, like everything we do at Amazon, starts with our customers. We've always been focused on expanding the marketplace for music streaming by offering music listeners unparalleled choice because we know that different listeners have different needs. As we continue to lead in our investment in voice with Alexa, and in high-quality audio with Amazon Music HD, we're excited to bring our customers and the music industry even more innovation in 2020 and beyond."

As with other Amazon products and services, the company has built its music offering around cross-selling existing customers -- namely those who are already using or considering its Prime membership service -- which helps Amazon with its economies of scale (promotions to customers who are already getting promotions cost less, for starters); and target consumers who are happy with the convenience of having all of its services under one bill. The discount for Prime users also serves as a sweetener for those considering subscribing to the membership tier.

Prime users get a discount on both single subscriptions to the Unlimited service ($7.99/month or $79/year) and Family plans. Similarly, those who only subscribe on a single device, either the Fire TV or Echo, can pay $3.99/month for the service. Amazon notes that the ad-supported service includes "top playlists and thousands of stations for free."

The general stickiness of Amazon media services -- which include storage, video, reading, games and more -- is a model that Apple is also following, building out a range of its own content offerings alongside those of the third-party apps in the App Store. Spotify has taken more of a music and audio-first approach, with its forays into areas like video never quite gaining traction. In its last earnings report, the company addressed its place in the market and the impact of rival services.

"We continue to feel very good about our competitive position in the market," Spotify noted in a statement. "Relative to Apple, the publicly available data shows that we are adding roughly twice as many subscribers per month as they are. Additionally, we believe that our monthly engagement is roughly 2x as high and our churn is at half the rate. Elsewhere, our estimates imply that we continue to add more users on an absolute basis than Amazon. Our data also suggests that Amazon’s user base skews significantly more to ‘Ad-Supported’ than ‘Premium’, and that average engagement on our platform is approximately 3x."

Amazon disputes this take, however. A spokesperson noted to me that "a substantial majority of the 55 million customers represents our paid tiers of service."