Amazon.com, Inc. (NASDAQ:AMZN) and Pandora Media Inc (NYSE:P) are reportedly working on introducing new music streaming services that will offer monthly subscriptions at $5.
Sources familiar with the dealings claim that the two firms are planning to launch the music streaming services over the next few weeks. The report was presented by the New York Times, citing various anonymous sources. The sources claim that Pandora’s new music platform will include new features such as saving playlists that can play for several hours or the ability to skip more songs. The media firm plans to launch the service by the holiday season. Amazon is also taking a similar approach according to the sources with both services aimed at competing with already existing rivals in the music streaming industry.
Amazon’s upcoming platform is reportedly expected to appeal to customers through competitive pricing which is expected to be at about $5, though this is yet to be confirmed. It is however expected that the price range will be between $5 and $10. The online giant retailer is also expected to throw in a comprehensive music catalog and also feature the ability to control music through its Alexa digital assistant, particularly with its Echo devices.
The two firms are also said to be in their final stages of negotiations with music publishers and record companies. Amazon has an advantage because there is a considerable number of people that already use the Amazon Echo while Pandora’s advantage is that it has been in the music industry for quite some time and can take advantage of previous subscriptions while also attracting new users.
There has been more competition between music streaming services over the past two years with new entries in the market such as Apple Music from Apple Inc. (NASDAQ:AAPL) among other services. The new music services from Amazon and Pandora will thus face fierce competition though they are expected to be well-equipped to handle it. Pricing has been one of the factors affecting monthly subscriptions and that is one of the target loopholes for the new players.
“Even with the presence of free, you can still get tens of millions to pay for streaming services — and possibly much more — in the event that you get the price much lower,” stated venture capitalist David Pakman.
Amazon stock closed the latest trading session at $771.49 with a 1.49% boost which is equivalent to an upward movement of $11.45.Pandora shares were valued at $14.29 per share at the end of the most recent trading session on Monday with an improvement of $0.67, equivalent to a 4.92% gain.