The top voice spokesman Amazon.com (NASDAQ: AMZN) is reportedly looking at adding a third music service to its portfolio, an ad-supported tier available for free on the popular line of Echo smart speakers. It will benefit from its dominant position in the speaker's smart marketplace to grow the music user base, potentially threatening Spotify (NYSE: SPOT) in the process. The free tier is the key to the growth of Swedish music streamers over the years, especially in emerging markets.
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL)
YouTube Music is free on Google Home
Google just adds YouTube Music support to Google Home speakers, as well as third-party smart speakers that include Google Assistant. Free, ad-supported services will not include on-demand access; Instead, users can ask Google Assistant to play stations or genres. The company expects people to upsell their YouTube Music Premium tier, which costs $ 10 per month and includes on-demand access to specific albums or songs, among other benefits like unlimited skip and offline listening.
The pre-emptive move Google simply does everything but certainly Amazon is following the suit with a similar offering. Google is a far cry from Amazon in terms of base installed U.S. smart speakers, according to recent estimates from Consumer Intelligence Research Partners (CIRP). The US-based smart speaking base of the United States has reached 66 million, CIRP estimates, with Amazon representing a dominant 70% of those devices and Google is coming from a distant second with 24%.
It's a hard fight to get paid subscribers
and Google are market leaders in smart speakers, not particularly evident in streaming music. While Amazon says it has "tens of millions" of music customers, most of them are only Amazon Prime members who have access to a limited catalog from Prime Music.
Apple (NASDAQ: AAPL) and Spotify are the bigwigs in streaming music, especially when it comes to paid subscribers instead of free users. Musical streaming subscriptions exceed 255 million in 2018, according to the International Federation of Phonographic Industry trade group. Apple Music and Spotify Premium earn about 60% of that total.
Cross-platform support has completely helped Spotify's success, ensuring its service is everywhere in the product categories. Apple is becoming more open to cross-platform support for Apple Music, recently hosting its service on Echos. Apple Music may come to Google Home as soon as possible. Having Apple Music and Spotify can hamper Amazon and Google's attempts to grow their own music streaming businesses, especially providing their content discovery capabilities – a major competitive place for music streaming service – is not as sophisticated as Spotify.  E-commerce and search giants can add free users, but getting more subscribers will be a difficult fight.