Amazon Prime has a number of compelling features that makes people glad to spend $79.99 per year. There is free shipping, a free eBook every single month and access to Amazon Instant Video. The Seattle based company announced during a recent earnings call that they were talking about increasing the Prime membership by $40.00. They cited rising shipping costs as being a prime motivator, but the price increase may also pave the way for a new Amazon Streaming Music Service.
Amazon is reportedly in talks with major music labels with the aim of releasing a music service of the future, hoping for low rates much as Apple did when negotiating for iTunes Radio. Amazon is hoping to go head to head with Beats, Spotify, Pandora, and Apple.
According to Re/Code “Amazon has been beefing up its roster of executives with digital music experience in the last few years. In October 2012, it hired Michael Paull, a Sony music executive, to head up its digital music operations. At the same time, it brought in Drew Denbo, who had handled business development at streaming services Rhapsody and MOG, to do the same job at the e-commerce site. And last year it hired Adam Parness, who handled licensing for Rhapsody.”
The industry standard for a streaming music service is currently six cents per 100 songs streamed. Apple ended up agreeing to pay 13 cents for each song played, along with 15% of net advertising revenue. Likely, Amazon is looking for the same deal, or cheaper.