SlideShare a Scribd company logo

Amazon Music - Market Analysis

A
A

Amazon Music - Market Analysis for Full Sail University's Portfolio II class, November 2022

Amazon Music - Market Analysis

1 of 11
Download to read offline
Page 1
A Market Analysis for
Amazon Music
Sarah Weathers
Full Sail University
Project & Portfolio II: Business and Marketing
November 18, 2022
Page 2
EXECUTIVE SUMMARY
This report reviews the current market, services, threats, and opportunities facing
Amazon Music. It looks at the tactics of new partnerships used by competitors and how it is
impacting Amazon Prime and Amazon Music. This report includes an overview of the company
and some information on the parent company, Amazon Music. The report includes
recommendations on how Amazon Music can increase and keep subscribers through specific
partnerships, and upgraded content, and recommends analysis reporting that could help Amazon
Music continue its growth.
Page 3
OBJECTIVE
This report was created to convince managers and key stakeholders of Amazon Prime
that opportunities exist to establish external partnerships and promotions to separate and elevate
its brand service, Amazon Music, from other competitors. Servicing a highly competitive and
creative market creates opportunities to target new and current users through the promotion of
original and exclusive content utilizing trending social media apps and partnerships with artist
labels.
RESEARCH METHODOLOGY
The information in this report uses internal and secondary research from the internet and
online databases. This research was collected during the month of November 2022, with
evidence as current as 2022. As it is released under the umbrella of Amazon's Prime Services,
specific information regarding revenue, profits, and market demographics for Amazon Music
could not be found. All information below regarding revenue, profits, and market for Amazon
comes from the combination of all Prime Services.
RESEARCH AND KEY FINDINGS
Streaming services and apps provide music listeners of today's day and age options due to
a highly competitive market. With new music and podcasts being promoted daily by record
labels and management, direct artist promotion, and other social media apps, finding a streaming
service that meets the consumer's needs can become a challenge with many options available.
Amazon Music is a brand service of Amazon.com, Inc. that provides users with an inclusive
music and podcast streaming platform featuring over 90 million songs available in various
subscription levels.
Page 4
Amazon.com, Inc. began in 1994 as an online bookstore founded by Jeff Bezos (Amazon
Statistics, 2022). Amazon has established itself beginning as an industry giant in the world of
products and services sales. Through their
various websites, they have become one of
the world’s largest online retailers, providing services throughout the North American region,
international regions, and online using Amazon Web Services (AWS) (NexisUni, 2022). In
addition to being an online sales hub for retailers around the world, Amazon also manufactures
and sells branded electronic devices that partner with its Prime services (NexisUni, 2022).
Amazon has positioned itself as a top industry leader by adhering to these four principles:
“Customer obsession rather than competitor focus, passion for invention, commitment to
operational excellence, and long-term thinking” (US About Amazon, 2020). Over the years,
Amazon has rolled out several subscription services, including Amazon Music, Prime Video,
Kindle Unlimited, Audible, Twitch, Prime Gaming, and other Subscribe & Save options.
Launched in 2007 by Amazon.com, Inc, Amazon Music became a brand service of the
parent company. Under the management of the company’s president, Andrew R. Jassy, Amazon
Music reached 68 million subscribers in 2021 (Amazon Music, 2021). The number of
subscribers has increased its competitive edge against streaming services like Apple Music,
Spotify, and Deezer (Amazon Music, 2021). A combination of Amazon’s other prime services,
Amazon Music provided $31.7 billion to Amazon’s total revenue in 2021 (Amazon Statistics,
2022). Offering a service that connects to their original Amazon Alexa and Echo products,
Amazon’s varying levels of subscriptions offer opportunities to gain new subscribers simply
because of convenience. In 2022, Amazon Music upgraded all Prime Subscribers to give full
access to their music and podcast collection, regardless of an additional subscription fee.
Page 5
Amazon.com, Inc., the parent company of Amazon Prime’s services, is financially stable,
experiencing a 7.77% increase over 52 weeks between 2020 and 2021 (Yahoo!, 2022). The
market index shifted 69.54% between the same time, with more than 17 billion shares sold in
2021, creating a net profit margin of 7% (Yahoo!, 2022).
Amazon’s Prime Services make up the fourth highest revenue for Amazon. These
subscription-based services provided $31.7 billion to Amazon’s total revenue in 2021 (Amazon
Statistics, 2022). The geographic makeup of Prime Subscribers includes the United States,
Europe, South America, Asia, Africa, and Australia, with the United States making up 60% and
the global market at 40% (Amazon Target Market 2022, 2022). Amazon reaches users ages 14
and older, with a 50% split of males and females (Amazon Target Market 2022, 2022). Roughly
82% of Prime users are aged 20-29 (Radic, D., 2022). Lower class, working class, middle class,
upper class, and those with a reformer lifestyle create the psychographic market of subscribers,
and includes those at a bachelor stage (young, single, and not living at home), newly married
couples, full nest I – III, and solitary survivors in the labor force and retired (Amazon
Segmentation, Targeting, and Position, 2022).
Consumers of Prime’s services seek out a wide range of products, the convenience of
online purchasing, competitive prices, and services provided and included in the general
membership (Amazon Segmentation, Targeting, and Position, 2022). As of 2021, Amazon Music
makes up 13.75% of the global streaming market share of subscribers, creating an opportunity
for significant growth and connection with new and current subscribers (Music streaming app
revenue and usage statistics, 2022).
Servicing a market as wide and varied as Amazon’s comes with many challenges,
opportunities, threats, and weaknesses to be aware of. Amazon has successfully launched several
initiatives to create space to “welcome the best and brightest talent from around the world” (US
Page 6
About Amazon, 2022). Amazon’s The Climate Pledge, Welcome Door programs, Housing
Equity Funds, and other initiatives and programs offer consumers, employees, and subscribers
further reasons to support the work and services of Amazon.com, Inc. To these same successes,
Amazon faces weaknesses and threats regarding service competitors, a limited global presence,
and rumors of a pending recession. Combatting the strengths, weaknesses, opportunities, and
threats will require Amazon Prime services to continue evaluating the services and benefits they
offer to their subscribers.
Amazon Music offers subscriptions in 3 levels, including free, unlimited, and family
plans. All subscription levels provide users access to over 2 million songs, top playlists, user-
curated playlists, thousands of Stations, Amazon’s podcast library, and playback on Echo and
Alexa-enabled devices (Goettsche Partners, 2011). In addition to the extensive content
collection, Amazon Music also offers streaming in Standard Definition (SD), High Definition
(HD), Ultra High Definition (Ultra HD), and Spatial Audio, depending on the devices and
speakers used, with Unlimited Subscribers being guaranteed the highest quality playback across
all devices (Goettsche Partners, 2011).
Amazon Music’s direct competitors, Spotify, Apple Music, and Deezer offer similar
subscription levels, at varying prices and features, including Student levels. Spotify is the most
popular streaming platform in the world with over 350 million users and 150 million subscribers
(Music streaming app revenue and
usage statistics, 2022). Apple Music
features 88 million subscribers as of
June 2021, with more subscribers
than Spotify in the United States
(Apple Music Revenue and Usage
Ad

Recommended

Spotify Marketing Campaign for Marketing Theory & Practice
Spotify Marketing Campaign for Marketing Theory & Practice Spotify Marketing Campaign for Marketing Theory & Practice
Spotify Marketing Campaign for Marketing Theory & Practice Mary Peters
 
Market Analysis: Apple Music
Market Analysis: Apple MusicMarket Analysis: Apple Music
Market Analysis: Apple MusicHannahGreve
 
Spotify Brand Audit IMC 613
Spotify Brand Audit IMC 613Spotify Brand Audit IMC 613
Spotify Brand Audit IMC 613Jamie Huggins
 
Digital Marketing - Spotify
Digital Marketing - SpotifyDigital Marketing - Spotify
Digital Marketing - SpotifyLaura Sorrentino
 
Competitor analysis of Music Streaming Services
Competitor analysis of Music Streaming ServicesCompetitor analysis of Music Streaming Services
Competitor analysis of Music Streaming ServicesTiffany Sam
 

More Related Content

What's hot

Spotify presentation
Spotify presentationSpotify presentation
Spotify presentationwmorris
 
Brand Audit - Spotify
Brand Audit - SpotifyBrand Audit - Spotify
Brand Audit - SpotifySuyash Sharma
 
Spotify. Strategy to remain the leader in the music industry.
Spotify. Strategy to remain the leader in the music industry.Spotify. Strategy to remain the leader in the music industry.
Spotify. Strategy to remain the leader in the music industry.Palina Supeyeva
 
Spotify Marketing Analysis Project
Spotify Marketing Analysis ProjectSpotify Marketing Analysis Project
Spotify Marketing Analysis ProjectMariaHenaoVivas
 
Spotify vs Apple Music: a strategic fight for the music streaming industry
Spotify vs Apple Music: a strategic fight for the music streaming industrySpotify vs Apple Music: a strategic fight for the music streaming industry
Spotify vs Apple Music: a strategic fight for the music streaming industryFederico Catellani
 
Digital strategy for spotify
Digital strategy for spotifyDigital strategy for spotify
Digital strategy for spotifyRishabh Heer
 
Spotify Company presentation
Spotify Company presentationSpotify Company presentation
Spotify Company presentationalifost
 
Innovation in the music industry
Innovation in the music industryInnovation in the music industry
Innovation in the music industryDaniela Bartos
 
Business model of Spotify
Business model of SpotifyBusiness model of Spotify
Business model of SpotifyAnirban Ghosh
 
Atlantic Records Business Model
Atlantic Records Business ModelAtlantic Records Business Model
Atlantic Records Business ModelNova Granite
 
Spotify Company Presentation
Spotify Company PresentationSpotify Company Presentation
Spotify Company PresentationErik Forkin
 
English - Presentation about Spotify
English - Presentation about SpotifyEnglish - Presentation about Spotify
English - Presentation about SpotifyVictoria Souza
 
Social Media Monitoring: The Case of Spotify
Social Media Monitoring: The Case of SpotifySocial Media Monitoring: The Case of Spotify
Social Media Monitoring: The Case of SpotifyValeria Aguerri
 
Social media audit- Spotify vs. Apple Music
Social media audit- Spotify vs. Apple MusicSocial media audit- Spotify vs. Apple Music
Social media audit- Spotify vs. Apple MusicHalaShihabeddin
 
Spotify Business Model Analysis
Spotify Business Model AnalysisSpotify Business Model Analysis
Spotify Business Model AnalysisTrevor Clendenin
 
Analysis of Spotify & New Feature Ideas
Analysis of Spotify & New Feature IdeasAnalysis of Spotify & New Feature Ideas
Analysis of Spotify & New Feature IdeasSarah L. Miller
 
Mtv case presentation
Mtv case presentationMtv case presentation
Mtv case presentationShanta Mishra
 
Präsentation über Spotify
Präsentation über Spotify Präsentation über Spotify
Präsentation über Spotify Karin Atzinger
 

What's hot (20)

Spotify
SpotifySpotify
Spotify
 
Spotify presentation
Spotify presentationSpotify presentation
Spotify presentation
 
Brand Audit - Spotify
Brand Audit - SpotifyBrand Audit - Spotify
Brand Audit - Spotify
 
Spotify. Strategy to remain the leader in the music industry.
Spotify. Strategy to remain the leader in the music industry.Spotify. Strategy to remain the leader in the music industry.
Spotify. Strategy to remain the leader in the music industry.
 
Spotify Marketing Analysis Project
Spotify Marketing Analysis ProjectSpotify Marketing Analysis Project
Spotify Marketing Analysis Project
 
Spotify vs Apple Music: a strategic fight for the music streaming industry
Spotify vs Apple Music: a strategic fight for the music streaming industrySpotify vs Apple Music: a strategic fight for the music streaming industry
Spotify vs Apple Music: a strategic fight for the music streaming industry
 
Digital strategy for spotify
Digital strategy for spotifyDigital strategy for spotify
Digital strategy for spotify
 
Spotify Company presentation
Spotify Company presentationSpotify Company presentation
Spotify Company presentation
 
Innovation in the music industry
Innovation in the music industryInnovation in the music industry
Innovation in the music industry
 
Business model of Spotify
Business model of SpotifyBusiness model of Spotify
Business model of Spotify
 
Apple Music
Apple MusicApple Music
Apple Music
 
Atlantic Records Business Model
Atlantic Records Business ModelAtlantic Records Business Model
Atlantic Records Business Model
 
Spotify Company Presentation
Spotify Company PresentationSpotify Company Presentation
Spotify Company Presentation
 
English - Presentation about Spotify
English - Presentation about SpotifyEnglish - Presentation about Spotify
English - Presentation about Spotify
 
Social Media Monitoring: The Case of Spotify
Social Media Monitoring: The Case of SpotifySocial Media Monitoring: The Case of Spotify
Social Media Monitoring: The Case of Spotify
 
Social media audit- Spotify vs. Apple Music
Social media audit- Spotify vs. Apple MusicSocial media audit- Spotify vs. Apple Music
Social media audit- Spotify vs. Apple Music
 
Spotify Business Model Analysis
Spotify Business Model AnalysisSpotify Business Model Analysis
Spotify Business Model Analysis
 
Analysis of Spotify & New Feature Ideas
Analysis of Spotify & New Feature IdeasAnalysis of Spotify & New Feature Ideas
Analysis of Spotify & New Feature Ideas
 
Mtv case presentation
Mtv case presentationMtv case presentation
Mtv case presentation
 
Präsentation über Spotify
Präsentation über Spotify Präsentation über Spotify
Präsentation über Spotify
 

Similar to Amazon Music - Market Analysis

Market Analysis Report on Amazon Prime Video
Market Analysis Report on Amazon Prime VideoMarket Analysis Report on Amazon Prime Video
Market Analysis Report on Amazon Prime VideoJessica Gold
 
Company Research for Spotify.
Company Research for Spotify.Company Research for Spotify.
Company Research for Spotify.QBaby
 
Initial Company Research
Initial Company ResearchInitial Company Research
Initial Company ResearchStefanieIdeker1
 
Amazon Prime Video Environmental Analysis
Amazon Prime Video Environmental AnalysisAmazon Prime Video Environmental Analysis
Amazon Prime Video Environmental AnalysisJessica Gold
 
Modi - Sharma - Is Spotify Sustainable in the Music Streaming Industry
Modi - Sharma - Is Spotify Sustainable in the Music Streaming IndustryModi - Sharma - Is Spotify Sustainable in the Music Streaming Industry
Modi - Sharma - Is Spotify Sustainable in the Music Streaming IndustryAbhinav Sharma
 
Market Analysis for Spotify
Market Analysis for SpotifyMarket Analysis for Spotify
Market Analysis for SpotifyQBaby
 
Activate Tech & Media Outlook 2018
Activate Tech & Media Outlook 2018Activate Tech & Media Outlook 2018
Activate Tech & Media Outlook 2018Activate
 
An Environmental Analysis for Amazon Prime Video
An Environmental Analysis for Amazon Prime Video An Environmental Analysis for Amazon Prime Video
An Environmental Analysis for Amazon Prime Video Jessica Gold
 
10 innovative business models
10 innovative business models10 innovative business models
10 innovative business modelsPrachi Pawaiya
 
Reading for Assignment 2Pandora is the Internet’s most successfu.docx
Reading for Assignment 2Pandora is the Internet’s most successfu.docxReading for Assignment 2Pandora is the Internet’s most successfu.docx
Reading for Assignment 2Pandora is the Internet’s most successfu.docxsodhi3
 
Spotify Market Analysis.pptx
Spotify Market Analysis.pptxSpotify Market Analysis.pptx
Spotify Market Analysis.pptxTaylorDePrimo
 
Android app marketing plan
Android app marketing planAndroid app marketing plan
Android app marketing planAshish Kapoor
 
Virginie Berger: New Digital Music Tools for New Needs - midem white paper
Virginie Berger: New Digital Music Tools for New Needs - midem white paperVirginie Berger: New Digital Music Tools for New Needs - midem white paper
Virginie Berger: New Digital Music Tools for New Needs - midem white papermidem
 

Similar to Amazon Music - Market Analysis (20)

Market Analysis Report on Amazon Prime Video
Market Analysis Report on Amazon Prime VideoMarket Analysis Report on Amazon Prime Video
Market Analysis Report on Amazon Prime Video
 
Company Research for Spotify.
Company Research for Spotify.Company Research for Spotify.
Company Research for Spotify.
 
Initial Company Research
Initial Company ResearchInitial Company Research
Initial Company Research
 
Amazon Prime Video Environmental Analysis
Amazon Prime Video Environmental AnalysisAmazon Prime Video Environmental Analysis
Amazon Prime Video Environmental Analysis
 
Modi - Sharma - Is Spotify Sustainable in the Music Streaming Industry
Modi - Sharma - Is Spotify Sustainable in the Music Streaming IndustryModi - Sharma - Is Spotify Sustainable in the Music Streaming Industry
Modi - Sharma - Is Spotify Sustainable in the Music Streaming Industry
 
IMC Strategy
IMC StrategyIMC Strategy
IMC Strategy
 
Market Analysis for Spotify
Market Analysis for SpotifyMarket Analysis for Spotify
Market Analysis for Spotify
 
Amazon
AmazonAmazon
Amazon
 
Market Analysis - Apple Music
Market Analysis - Apple MusicMarket Analysis - Apple Music
Market Analysis - Apple Music
 
Final Project
Final ProjectFinal Project
Final Project
 
Activate Tech & Media Outlook 2018
Activate Tech & Media Outlook 2018Activate Tech & Media Outlook 2018
Activate Tech & Media Outlook 2018
 
An Environmental Analysis for Amazon Prime Video
An Environmental Analysis for Amazon Prime Video An Environmental Analysis for Amazon Prime Video
An Environmental Analysis for Amazon Prime Video
 
10 innovative business models
10 innovative business models10 innovative business models
10 innovative business models
 
Reading for Assignment 2Pandora is the Internet’s most successfu.docx
Reading for Assignment 2Pandora is the Internet’s most successfu.docxReading for Assignment 2Pandora is the Internet’s most successfu.docx
Reading for Assignment 2Pandora is the Internet’s most successfu.docx
 
IMC Plan
IMC PlanIMC Plan
IMC Plan
 
Music Industry
Music IndustryMusic Industry
Music Industry
 
Media global market report 2018
Media global market report 2018Media global market report 2018
Media global market report 2018
 
Spotify Market Analysis.pptx
Spotify Market Analysis.pptxSpotify Market Analysis.pptx
Spotify Market Analysis.pptx
 
Android app marketing plan
Android app marketing planAndroid app marketing plan
Android app marketing plan
 
Virginie Berger: New Digital Music Tools for New Needs - midem white paper
Virginie Berger: New Digital Music Tools for New Needs - midem white paperVirginie Berger: New Digital Music Tools for New Needs - midem white paper
Virginie Berger: New Digital Music Tools for New Needs - midem white paper
 

Recently uploaded

Trumps Racist problem, White Nationalist.pdf
Trumps Racist problem, White Nationalist.pdfTrumps Racist problem, White Nationalist.pdf
Trumps Racist problem, White Nationalist.pdfSourav Sikder
 
Trending Topics for events Presentation.pdf
Trending Topics for events Presentation.pdfTrending Topics for events Presentation.pdf
Trending Topics for events Presentation.pdfgaju619
 
Business brief document explanation forward
Business brief document explanation forwardBusiness brief document explanation forward
Business brief document explanation forwardCJHaight
 
publicpolicy-130621235359-phpapp02 2.pdf
publicpolicy-130621235359-phpapp02 2.pdfpublicpolicy-130621235359-phpapp02 2.pdf
publicpolicy-130621235359-phpapp02 2.pdfmmople
 
Database Set Up Basics Bloomerang Academy
Database Set Up Basics Bloomerang AcademyDatabase Set Up Basics Bloomerang Academy
Database Set Up Basics Bloomerang AcademyBloomerang
 
Decoding Generative AI-AI Playbook for Marketing Students_UPower DUGA_Supavad...
Decoding Generative AI-AI Playbook for Marketing Students_UPower DUGA_Supavad...Decoding Generative AI-AI Playbook for Marketing Students_UPower DUGA_Supavad...
Decoding Generative AI-AI Playbook for Marketing Students_UPower DUGA_Supavad...Supavadee(Noi) Tantiyanon
 
New Zealand Franchising Confidence Index | January 2024
New Zealand Franchising Confidence Index | January 2024New Zealand Franchising Confidence Index | January 2024
New Zealand Franchising Confidence Index | January 2024Franchize Consultants
 
Medirom Healthcare Technologies Inc. Investor Presentation
Medirom  Healthcare Technologies Inc. Investor PresentationMedirom  Healthcare Technologies Inc. Investor Presentation
Medirom Healthcare Technologies Inc. Investor Presentationssusera2656e
 
The Times 100 Business Case Studies - StayBetterDXB.pdf
The Times 100 Business Case Studies - StayBetterDXB.pdfThe Times 100 Business Case Studies - StayBetterDXB.pdf
The Times 100 Business Case Studies - StayBetterDXB.pdfStayBetterDxb
 
PDT 84 - 16m - Series A - Equals for Pitch Deck Teardown / Techcrunch
PDT 84 - 16m - Series A - Equals for Pitch Deck Teardown / TechcrunchPDT 84 - 16m - Series A - Equals for Pitch Deck Teardown / Techcrunch
PDT 84 - 16m - Series A - Equals for Pitch Deck Teardown / TechcrunchHajeJanKamps
 
The Economic Benefits of Reshoring to Mexico
The Economic Benefits of Reshoring to MexicoThe Economic Benefits of Reshoring to Mexico
The Economic Benefits of Reshoring to MexicoNovaLink
 
HPM Panther (Captan 50% WP) Presentation
HPM Panther (Captan 50% WP) PresentationHPM Panther (Captan 50% WP) Presentation
HPM Panther (Captan 50% WP) PresentationHpm India
 
Sample Competitors' SWOT Analysis for your SEO Strategy
Sample Competitors' SWOT Analysis for your SEO StrategySample Competitors' SWOT Analysis for your SEO Strategy
Sample Competitors' SWOT Analysis for your SEO StrategyRemar Barquilla
 
04 - The Greenhouse Effect.ppt.pptx
04 - The Greenhouse Effect.ppt.pptx04 - The Greenhouse Effect.ppt.pptx
04 - The Greenhouse Effect.ppt.pptxmmpnair0
 
UPDATEDJenkins_Jennifer_EBS_PB1_2023-July.pptx
UPDATEDJenkins_Jennifer_EBS_PB1_2023-July.pptxUPDATEDJenkins_Jennifer_EBS_PB1_2023-July.pptx
UPDATEDJenkins_Jennifer_EBS_PB1_2023-July.pptxJenniferJenkins94
 
"ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst...
"ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst..."ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst...
"ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst...Rachele Fleming
 
How to generate FOMO for your next launch (in 4 steps).pptx
How to generate FOMO for your next launch (in 4 steps).pptxHow to generate FOMO for your next launch (in 4 steps).pptx
How to generate FOMO for your next launch (in 4 steps).pptxFOMO Creator
 

Recently uploaded (20)

Polyene General Industries Private Limited
Polyene General Industries Private LimitedPolyene General Industries Private Limited
Polyene General Industries Private Limited
 
Trumps Racist problem, White Nationalist.pdf
Trumps Racist problem, White Nationalist.pdfTrumps Racist problem, White Nationalist.pdf
Trumps Racist problem, White Nationalist.pdf
 
Trending Topics for events Presentation.pdf
Trending Topics for events Presentation.pdfTrending Topics for events Presentation.pdf
Trending Topics for events Presentation.pdf
 
Business brief document explanation forward
Business brief document explanation forwardBusiness brief document explanation forward
Business brief document explanation forward
 
publicpolicy-130621235359-phpapp02 2.pdf
publicpolicy-130621235359-phpapp02 2.pdfpublicpolicy-130621235359-phpapp02 2.pdf
publicpolicy-130621235359-phpapp02 2.pdf
 
Non-Residual Infusion Bag
Non-Residual Infusion BagNon-Residual Infusion Bag
Non-Residual Infusion Bag
 
Database Set Up Basics Bloomerang Academy
Database Set Up Basics Bloomerang AcademyDatabase Set Up Basics Bloomerang Academy
Database Set Up Basics Bloomerang Academy
 
Decoding Generative AI-AI Playbook for Marketing Students_UPower DUGA_Supavad...
Decoding Generative AI-AI Playbook for Marketing Students_UPower DUGA_Supavad...Decoding Generative AI-AI Playbook for Marketing Students_UPower DUGA_Supavad...
Decoding Generative AI-AI Playbook for Marketing Students_UPower DUGA_Supavad...
 
New Zealand Franchising Confidence Index | January 2024
New Zealand Franchising Confidence Index | January 2024New Zealand Franchising Confidence Index | January 2024
New Zealand Franchising Confidence Index | January 2024
 
Medirom Healthcare Technologies Inc. Investor Presentation
Medirom  Healthcare Technologies Inc. Investor PresentationMedirom  Healthcare Technologies Inc. Investor Presentation
Medirom Healthcare Technologies Inc. Investor Presentation
 
The Times 100 Business Case Studies - StayBetterDXB.pdf
The Times 100 Business Case Studies - StayBetterDXB.pdfThe Times 100 Business Case Studies - StayBetterDXB.pdf
The Times 100 Business Case Studies - StayBetterDXB.pdf
 
PDT 84 - 16m - Series A - Equals for Pitch Deck Teardown / Techcrunch
PDT 84 - 16m - Series A - Equals for Pitch Deck Teardown / TechcrunchPDT 84 - 16m - Series A - Equals for Pitch Deck Teardown / Techcrunch
PDT 84 - 16m - Series A - Equals for Pitch Deck Teardown / Techcrunch
 
The Economic Benefits of Reshoring to Mexico
The Economic Benefits of Reshoring to MexicoThe Economic Benefits of Reshoring to Mexico
The Economic Benefits of Reshoring to Mexico
 
HPM Panther (Captan 50% WP) Presentation
HPM Panther (Captan 50% WP) PresentationHPM Panther (Captan 50% WP) Presentation
HPM Panther (Captan 50% WP) Presentation
 
Sample Competitors' SWOT Analysis for your SEO Strategy
Sample Competitors' SWOT Analysis for your SEO StrategySample Competitors' SWOT Analysis for your SEO Strategy
Sample Competitors' SWOT Analysis for your SEO Strategy
 
04 - The Greenhouse Effect.ppt.pptx
04 - The Greenhouse Effect.ppt.pptx04 - The Greenhouse Effect.ppt.pptx
04 - The Greenhouse Effect.ppt.pptx
 
UPDATEDJenkins_Jennifer_EBS_PB1_2023-July.pptx
UPDATEDJenkins_Jennifer_EBS_PB1_2023-July.pptxUPDATEDJenkins_Jennifer_EBS_PB1_2023-July.pptx
UPDATEDJenkins_Jennifer_EBS_PB1_2023-July.pptx
 
"ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst...
"ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst..."ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst...
"ZERO-COST PASSIVE INCOME MASTERY: THE 3-STEP SYSTEM" Same Proven 3-Step Syst...
 
How to generate FOMO for your next launch (in 4 steps).pptx
How to generate FOMO for your next launch (in 4 steps).pptxHow to generate FOMO for your next launch (in 4 steps).pptx
How to generate FOMO for your next launch (in 4 steps).pptx
 
Pan Dhoni - Modernizing Data And Analytics using AI.pdf
Pan Dhoni - Modernizing Data And Analytics using AI.pdfPan Dhoni - Modernizing Data And Analytics using AI.pdf
Pan Dhoni - Modernizing Data And Analytics using AI.pdf
 

Amazon Music - Market Analysis

  • 1. Page 1 A Market Analysis for Amazon Music Sarah Weathers Full Sail University Project & Portfolio II: Business and Marketing November 18, 2022
  • 2. Page 2 EXECUTIVE SUMMARY This report reviews the current market, services, threats, and opportunities facing Amazon Music. It looks at the tactics of new partnerships used by competitors and how it is impacting Amazon Prime and Amazon Music. This report includes an overview of the company and some information on the parent company, Amazon Music. The report includes recommendations on how Amazon Music can increase and keep subscribers through specific partnerships, and upgraded content, and recommends analysis reporting that could help Amazon Music continue its growth.
  • 3. Page 3 OBJECTIVE This report was created to convince managers and key stakeholders of Amazon Prime that opportunities exist to establish external partnerships and promotions to separate and elevate its brand service, Amazon Music, from other competitors. Servicing a highly competitive and creative market creates opportunities to target new and current users through the promotion of original and exclusive content utilizing trending social media apps and partnerships with artist labels. RESEARCH METHODOLOGY The information in this report uses internal and secondary research from the internet and online databases. This research was collected during the month of November 2022, with evidence as current as 2022. As it is released under the umbrella of Amazon's Prime Services, specific information regarding revenue, profits, and market demographics for Amazon Music could not be found. All information below regarding revenue, profits, and market for Amazon comes from the combination of all Prime Services. RESEARCH AND KEY FINDINGS Streaming services and apps provide music listeners of today's day and age options due to a highly competitive market. With new music and podcasts being promoted daily by record labels and management, direct artist promotion, and other social media apps, finding a streaming service that meets the consumer's needs can become a challenge with many options available. Amazon Music is a brand service of Amazon.com, Inc. that provides users with an inclusive music and podcast streaming platform featuring over 90 million songs available in various subscription levels.
  • 4. Page 4 Amazon.com, Inc. began in 1994 as an online bookstore founded by Jeff Bezos (Amazon Statistics, 2022). Amazon has established itself beginning as an industry giant in the world of products and services sales. Through their various websites, they have become one of the world’s largest online retailers, providing services throughout the North American region, international regions, and online using Amazon Web Services (AWS) (NexisUni, 2022). In addition to being an online sales hub for retailers around the world, Amazon also manufactures and sells branded electronic devices that partner with its Prime services (NexisUni, 2022). Amazon has positioned itself as a top industry leader by adhering to these four principles: “Customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking” (US About Amazon, 2020). Over the years, Amazon has rolled out several subscription services, including Amazon Music, Prime Video, Kindle Unlimited, Audible, Twitch, Prime Gaming, and other Subscribe & Save options. Launched in 2007 by Amazon.com, Inc, Amazon Music became a brand service of the parent company. Under the management of the company’s president, Andrew R. Jassy, Amazon Music reached 68 million subscribers in 2021 (Amazon Music, 2021). The number of subscribers has increased its competitive edge against streaming services like Apple Music, Spotify, and Deezer (Amazon Music, 2021). A combination of Amazon’s other prime services, Amazon Music provided $31.7 billion to Amazon’s total revenue in 2021 (Amazon Statistics, 2022). Offering a service that connects to their original Amazon Alexa and Echo products, Amazon’s varying levels of subscriptions offer opportunities to gain new subscribers simply because of convenience. In 2022, Amazon Music upgraded all Prime Subscribers to give full access to their music and podcast collection, regardless of an additional subscription fee.
  • 5. Page 5 Amazon.com, Inc., the parent company of Amazon Prime’s services, is financially stable, experiencing a 7.77% increase over 52 weeks between 2020 and 2021 (Yahoo!, 2022). The market index shifted 69.54% between the same time, with more than 17 billion shares sold in 2021, creating a net profit margin of 7% (Yahoo!, 2022). Amazon’s Prime Services make up the fourth highest revenue for Amazon. These subscription-based services provided $31.7 billion to Amazon’s total revenue in 2021 (Amazon Statistics, 2022). The geographic makeup of Prime Subscribers includes the United States, Europe, South America, Asia, Africa, and Australia, with the United States making up 60% and the global market at 40% (Amazon Target Market 2022, 2022). Amazon reaches users ages 14 and older, with a 50% split of males and females (Amazon Target Market 2022, 2022). Roughly 82% of Prime users are aged 20-29 (Radic, D., 2022). Lower class, working class, middle class, upper class, and those with a reformer lifestyle create the psychographic market of subscribers, and includes those at a bachelor stage (young, single, and not living at home), newly married couples, full nest I – III, and solitary survivors in the labor force and retired (Amazon Segmentation, Targeting, and Position, 2022). Consumers of Prime’s services seek out a wide range of products, the convenience of online purchasing, competitive prices, and services provided and included in the general membership (Amazon Segmentation, Targeting, and Position, 2022). As of 2021, Amazon Music makes up 13.75% of the global streaming market share of subscribers, creating an opportunity for significant growth and connection with new and current subscribers (Music streaming app revenue and usage statistics, 2022). Servicing a market as wide and varied as Amazon’s comes with many challenges, opportunities, threats, and weaknesses to be aware of. Amazon has successfully launched several initiatives to create space to “welcome the best and brightest talent from around the world” (US
  • 6. Page 6 About Amazon, 2022). Amazon’s The Climate Pledge, Welcome Door programs, Housing Equity Funds, and other initiatives and programs offer consumers, employees, and subscribers further reasons to support the work and services of Amazon.com, Inc. To these same successes, Amazon faces weaknesses and threats regarding service competitors, a limited global presence, and rumors of a pending recession. Combatting the strengths, weaknesses, opportunities, and threats will require Amazon Prime services to continue evaluating the services and benefits they offer to their subscribers. Amazon Music offers subscriptions in 3 levels, including free, unlimited, and family plans. All subscription levels provide users access to over 2 million songs, top playlists, user- curated playlists, thousands of Stations, Amazon’s podcast library, and playback on Echo and Alexa-enabled devices (Goettsche Partners, 2011). In addition to the extensive content collection, Amazon Music also offers streaming in Standard Definition (SD), High Definition (HD), Ultra High Definition (Ultra HD), and Spatial Audio, depending on the devices and speakers used, with Unlimited Subscribers being guaranteed the highest quality playback across all devices (Goettsche Partners, 2011). Amazon Music’s direct competitors, Spotify, Apple Music, and Deezer offer similar subscription levels, at varying prices and features, including Student levels. Spotify is the most popular streaming platform in the world with over 350 million users and 150 million subscribers (Music streaming app revenue and usage statistics, 2022). Apple Music features 88 million subscribers as of June 2021, with more subscribers than Spotify in the United States (Apple Music Revenue and Usage
  • 7. Page 7 Statistics, 2022). A relatively new service, Deezer, makes up 1.42% of the global streaming market share by subscribers as of 2021 (Music streaming app revenue and usage statistics, 2022), with only 9.4 million subscribers as of September 2022 (Wendel, J., 2022). The royalty rate (per stream) offered by Amazon Music is $0.00402, requiring 249 streams to make $1.00, compared to Apple Music’s average Royalty Rate of $0.008 per stream, Spotify’s $0.00318 per stream, and Deezer’s $0.0011 per stream (Fitzjohn, S., & Tips, M. M., 2022). Another competitor not typically considered is the world-renowned social media app, TikTok. In late 2022, TikTok parent, ByteDance, has released news of its partnership with Spotify with “Music-Streaming Expansion” (Toonkel, J., Steele, A., & Rodriguez, S., 2022). According to TikTok’s 2021 Music Report, over 175 songs that trended on the app were on the chart for the Billboard Hot 100, making them the number 1 stream driver (TikTok, 2021). Songs trending on the app drive trending songs on Spotify, even for unsigned artists (TikTok, 2021). TikTok has revealed that 75% of its US users discover new artists when using the app, and over 63% of all users state they have heard new music via the platform (Stassen, M., 2021). A report from MCR Data states that 67% of TikTok users say they are more likely to seek out a song heard on TikTok on their subscribed music streaming platform (Strassen, M., 2021). CONCLUSIONS Amazon.com, Inc is holding the market well in their overall services and against the competition, even though their business plans and tactics are easily recreated for competitors.
  • 8. Page 8 Amazon’s Prime Services is successful, due in part to its partnerships established and the features included for all subscribers. Amazon Music has experienced growth in subscribers and will likely continue to see this continue with the recent change in upgrading all prime subscribers to the full music and podcast library without an additional subscription. Pending partnerships between Spotify and TikTok, and any others that may form, create a new dynamic for Amazon Music to compete with to remain successful in this market. RECOMMENDATIONS Based on the research and conclusions, Amazon Music needs to find new ways to reach new subscribers and keep current users to stand out and remain competitive in this market. Amazon should begin creating and updating “Trending on TikTok” playlists, featuring songs subscribers are already researching, by February 2023. These songs should also be added to the user’s curated “Top Songs”, “Songs You May Like”, and “This Year’s Top Songs” playlists throughout the year. Opportunity for continued and expanded partnerships for exclusive and original content exists to draw new subscribers and current subscribers. Amazon should look at developing half-year or full-year contracts with Sony Music Entertainment and Universal Music Group to exclusively promote artist’s original releases, exclusive interviews, music videos, and docu-series for recently signed artists from TikTok to draw in users looking for new artists and new music. If executed within the next year, TikTok’s partnerships with Spotify will still drive users and subscribers to Amazon Music to find this content. Another area to be considered is adjusting and offering premium royalty rates to all artists, including independent artists. Extending royalties to independent artists gives space to release exclusive and original content within Amazon’s music streaming app. Artists will have reason to
  • 9. Page 9 partner with Amazon Music and any label partnerships that exist to share their music and will draw new users to become subscribers. Offering higher royalty rates per stream provides the opportunity for more exclusive and original content to be promoted and provided by artists, creating higher revenue and subscribers for Amazon Music. Continued evaluation of Amazon Music and its competitors should be conducted consistently throughout the year to provide insight into new trends and opportunities within the market. An official analysis and report should be completed yearly to track progress and evaluate new strengths, weaknesses, opportunities, and threats. These reports and evaluations could create updated recommendations and tactics to support Amazon Music.
  • 10. Page 10 REFERENCES Amazon segmentation, targeting and positioning: Widest range of target customer segment - research-methodology. Business Research Methodology. (2022, March 23). Retrieved October 29, 2022, from https://research-methodology.net/amazon-segmentation-targeting- positioning-widest-range-target-customer-segment-2/ Amazon Music. Music Business Worldwide. (2021, February 4). Retrieved October 28, 2022, from https://www.musicbusinessworldwide.com/companies/amazon/amazon-music/ Amazon target market 2022: Age & Gender Statistics + Strategy. Cherry Picks. (2022, October 22). Retrieved October 29, 2022, from https://www.cherrypicksreviews.com/blog/amazon- target-market Amazon Statistics (2022). Business of Apps. (2022, August 11). Retrieved October 28, 2022, from https://www.businessofapps.com/data/amazon-statistics/ Apple Music Revenue and Usage Statistics (2022). Business of Apps. (2022, October 28). Retrieved October 29, 2022, from https://www.businessofapps.com/data/apple-music- statistics/ Fitzjohn, S., & Tips, M. M. (2022, August 3). Streaming payouts per platform & royalties calculator. Producer Hive. Retrieved October 29, 2022, from https://producerhive.com/music-marketing-tips/streaming-royalties-breakdown/ Goettsche Partners. (2011). What Are the Differences Between the Amazon Music Subscriptions? Amazon. Retrieved October 28, 2022, from https://www.amazon.com/gp/help/customer/display.html?nodeId=GW3PHAUCZM8L7W9L Music Streaming App Revenue and Usage Statistics (2022). Business of Apps. (2022, September 12). Retrieved October 29, 2022, from https://www.businessofapps.com/data/music- streaming-market/ NexisUni. October 17, 2022. Amazon.com, Inc. Company Dossier in Nexis Uni. Radić, D. (2022, October 3). Amazon Customer Demographics 2022: Users, target market. Serpwatch.io. Retrieved October 29, 2022, from https://serpwatch.io/blog/amazon-customer- demographics/ Stassen, M. (2021, July 21). 75% of TikTok's users say they discover new artists on the platform. Music Business Worldwide. Retrieved November 18, 2022, from https://www.musicbusinessworldwide.com/tiktok-has-over-800m-active-users-worldwide- 75-of-them-say-they-discover-new-artists-on-the-platform/ TikTok. (2021, December 13). Year on tiktok 2021 music report. Newsroom. Retrieved November 18, 2022, from https://newsroom.tiktok.com/en-us/year-on-tiktok-music-report-2021
  • 11. Page 11 Toonkel, J., Steele, A., & Rodriguez, S. (2022, October 14). Tiktok parent bytedance sets sights on Spotify with music-streaming expansion. The Wall Street Journal. Retrieved November 19, 2022, from https://www.wsj.com/articles/tiktok-parent-bytedance-plans-music-streaming- expansion-11665602937 US About Amazon. (2022). Our positions. US About Amazon. Retrieved November 4, 2022, from https://www.aboutamazon.com/about-us/our-positions US About Amazon. (2020, September 18). Who we are: Amazon. US About Amazon. Retrieved October 28, 2022, from https://www.aboutamazon.com/about-us Yahoo! (2022). AMZN Interactive Stock Chart | Amazon.com, Inc.. stock. Yahoo! Finance. Retrieved October 28, 2022, from https://finance.yahoo.com/quote/AMZN?p=AMZN IMAGES: Buckle, B. (2022, October 17). TikTok teases new music streaming platform TikTok Music. Mixmag. Retrieved November 20, 2022, from https://mixmag.net/read/tiktok-launching- new-music-streaming-app-tech Amazon Music Unlimited Review. PCMAG. (n.d.). Retrieved November 20, 2022, from https://www.pcmag.com/reviews/amazon-music-unlimited Lupis, J. C. (2022, March 15). The number of paid music subscriptions in the US grew by >10% last year. Marketing Charts. Retrieved November 20, 2022, from https://www.marketingcharts.com/industries/media-and-entertainment-225252