Amazon Music caters to both passive and active listeners

Across its numerous tiers, Amazon Music has a relatively older userbase that mainly streams music passively. Amazon Music can play to these habits to differentiate itself from other streaming services, becoming a home for the more casual music listener. However, it is also working towards encouraging active listening with new features, as well as growing a more active podcast listener base.

Amazon Music has three main tiers: a free, ad-supported tier; an ad-free subscription for Amazon Prime members; and an Amazon Music Unlimited premium subscription. The share of those users who primarily stream music in the background of something else is 52%, 56%, and 52%, respectively. The share of focused listeners is 20%, 20%, and 21%, respectively, and the share who interact with friends is 18%, 13%, and 21%. These passive listening habits may have partly to do with the fact that the userbase leans older: Prime Music’s userbase has an average age of 41, while most streaming services have user average ages in the 30s. 

These habits could actually be an asset for Amazon, which can target older, more casual music consumers — competing around, for example, Spotify’s pursuit of gen Z. However, Amazon’s high proportion of background listening also leaves it at risk of churn. Thankfully, due to its smaller size (Unlimited has just 9% weekly active user (WAU) penetration), Amazon actually has a high proportion of music aficionados — consumers who spend the most time and money on music. 38% of Unlimited WAUs are aficionados, compared to just 19% of Spotify WAUs. 

Amazon is catering to these more active music fans with investments in concert live streaming and the ability for artists to connect their profiles on the streaming app to merchandise stores through its retail arm. Furthermore, Amazon has developed more engaging content with music on Alexa, such as Spotlight, which allows artists to add voice messages to talk about their creative process or promote a tour. With these moves, Amazon is serving both passive and active listeners, as well as building a bridge to help flip the background gap.

On the podcasting front, only 13% of podcast listeners normally access podcasts on Amazon Music. To help grow the format, Amazon, in November, unlocked a range of ad-free podcasts to Prime members. Since ads are the biggest downside to podcast listening for many consumers, this move may help consumers actively tune in for longer time periods.