A Quick Follow-Up on Amazon (Premium)

Yesterday, I discussed how I don’t really take advantage of many of Amazon’s digital services. In a strange coincidence, there were two related news stories today that build on that discussion.

As I noted in Thinking About Amazon (Premium), Seattle’s other tech giant has some advantages that its competitors can’t match, especially its ability to digital benefits to physical services like Prime.

Most of the conversation was about my belief that most Prime customers don’t really take full advantage of those Prime digital benefits—I certainly don’t—and that this doesn’t represent a huge issue for Amazon: It can support lower-volume services simply because Prime is so hugely successful.

I wrote that article yesterday. And in an odd coincidence, there were two bits of Amazon services news today that are already evolving my views of these services. One predictable, one not.

So let’s start with the surprise: Last week, Amazon Prime Video finally appeared on Apple TV. It is reasonable to expect that this app would be a popular download, especially in its first week. And that usage would then settle down to something more normal.

Instead, Apple confirmed today that Amazon Prime Video is the most downloaded of any Apple TV app ever in its first seven days. It set a record. Somehow.

This makes no sense to me because Amazon Prime Video—which you get free as part of an Amazon Prime membership—is nothing special. It is not as good a service a Netflix or Hulu. And that’s true when you look at original content, too: Amazon has nothing as popular as, say, Orange is the New Black, House of Cards, or The Handmaid’s Tale.

It’s possible this really says something about the poor selection of apps that are available on Apple TV, and that users are simply starved for something new. Some have suggested that it’s because there are just so many Prime video users—which I’m not buying—or that shows like Top Gear are more popular than I believe. Sorry, I just don’t see it.

But there you go: It set a record.

In the more predictable—and believable—vein, Amazon revealed today that it is canceling its so-called Amazon Music Storage Subscriptions. This may require a bit of explanation.

Amazon offers a weird range of music services and subscriptions, some of which bridge the physical and the digital (for example, when you buy music CDs, you can get the digital version of that CD added to your cloud-based music collection automatically). Put another way, some of these services are modern. And some are relics.

Amazon Music Storage Subscriptions was the type of thing that users wanted before streaming music services like Spotify or Apple Music became popular. The idea was that you had ripped your own CDs and wanted to upload that music to the cloud so that you could access it anywhere.

Amazon’s solution was (and still is) an Amazon Music app for PC and Mac that would let you upload your music to the Amazon cloud service. Everyone who uses Amazon Music can upload 250 songs for free. But if you needed more songs uploaded, you could purchase a $24.99/year Music Storage plan that allowed for 250,000 songs.

That is what is going away. According to Amazon, customers who are using this plan can keep doing so until January 2019. But it is removing the ability to upload new songs effective immediately.

What this tells me is that Amazon is moving more firmly into purely digital music services. It has a Spotify-like service already, Amazon Music Unlimited, which costs $7.99 per month or $79 per year. It has a Prime Music service, which is free with Amazon Prime, that lets you stream from a collection of 2 million songs for free. And it has that CD buying service, where many of your music CD purchases are auto-added to your Amazon Music collection.

(If you still need access to your own music in the cloud, Google Play Music is the best option: This service lets you upload your own music for free. But Apple still offers something called iTunes Music Match that costs $25 a year as well. I’m curious if that will disappear now.)

The issue with the Amazon Music Storage Subscription is that Amazon literally had to have unique storage for every user; with its more modern streaming services, all of the customers stream from the same pool. So it’s way more cost-effective.

But I think the underlying message here is the one I was trying to make yesterday: Not that many people actually use a lot of Amazon’s consumer services. And in the case of a service like Amazon Music Storage Subscription, it just didn’t make sense to keep it going. If this was popular, I suspect it would still be offered and might even require a price hike.

Anyway, some interesting timing on these two things.