The Billboard Magazine interviewed Jeff Bezos and Amazon Music vice president Steve Boom about Echo, Alexa and music:
A 2005 internal experiment with music streaming at Amazon was scuttled before it launched, creating a opening that’s now filled by Spotify, with 40 million subscribers, and Apple Music, with 20 million. The company’s latest bid for more eardrums is Amazon Music Unlimited, a subscription-based streaming service launched in October 2016.
It is rather interesting that Bezos gave an interview regarding music and Echo. Read his big picture vision on Alexa:
Bezos envisions multiple Echoes in each home, plus one in the car. The more of these devices Amazon sells, the more the music industry stands to earn, catalyzing a virtuous cycle. “One of the primary use cases we had in mind when we invented Echo and Alexa was making the music streaming process in the home completely friction-free,” he says. “If you make things easier, people do more of it.” […]
For sure, if you have a 2-year-old and you see that you’re running low on diapers, we want to make that easy for you. But voice interface is only going to take you so far on shopping. It’s good for reordering consumables, where you don’t have to make a lot of choices, but most online shopping is going to be facilitated by having a display. Alexa is primarily about identifying tasks in the household that would be improved by voice. Music is one. Another is home automation. So, you can say, “Alexa, turn off all the lights in the house.” “Alexa, turn the temperature up two degrees.” That’s really an amazing thing to be able to do.
What a masterful PR move.
Here is the thing: (reordering) consumables are such a gigantic market that even a fraction of it dwarfs the whole music industry. To get some perspective, P&G and Unilever’s combined ad budgets are larger than the global revenue of the recorded music industry.
So, why insist on music?
It will never be the main revenue driver for Alexa. And it certainly has not been the reason for Amazon to go into the voice platform business. But it is important nonetheless: Accessing music easily via Alexa is a main job it has to solve, a hygiene function. It makes sense to build a first-party service for this.
But it is the other way round than what Jeff Bezos wants Billboard’s audience (the music industry) to believe: Echo and Alexa are not here to make access to music easier. Access to music is here to justify Echo’s and Alexa’s existence in our lifes.
You can not just build a store front-end and expect it to be as successful as a general interest platform with similar features. Alexa/Echo would not be interesting to many people if it were just a way to order groceries and put items on Amazon’s wishlist. These features will give Amazon a big advantage long term. But they have to be baked into a ‘wider’ platform, so to speak.
Alexa has to be more, and, similar crucially, has to be viewed by customers as more than just another kind of store. (Or else people may not buy the devices in the first place or don’t explore the possibilities once they bought the gadgets and, after a while, may replace them with devices belonging to a different platform. Discoverability of platform capabilities is not just a technology issue.)
But don’t get fooled. At the end of the day, Amazon is an online retailer. That is not a disadvantage. It means Amazon has business model advantages against almost any other tech company when it comes to voice assistants. And Amazon is poised to own a big chunk of a very large market.
And in the end, the result remains the same. Amazon, like everyone else, has to build a successful general interest platform, or else the users go elsewhere.
On a sidenote, an interesting tidbit from the interview:
For example, at our Amazon Fresh business, we now have a machine-learning system that outperforms humans on grading strawberries.
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