Amazon Unveils Music-Streaming Service Ahead of Google, Apple

Amazon.com Inc. (AMZN) joined the ranks of music-streaming services today by unveiling Cloud Player, letting users buy tracks, store them on the company’s servers and play them on computers and Android smartphones.

Music libraries can be uploaded to Amazon’s new Cloud Drive, with 5 gigabytes of memory available free, the company said in a statement. Users who purchase an album from Amazon.com will be upgraded to 20 gigabytes of Cloud Drive space, which can be used to store music, photos, videos and other digital files.

“Our customers have told us they don’t want to download music to their work computer or phones because they find it hard to move music around to different devices,” Bill Carr, vice president of movies and music, said in the statement.

The move by Amazon places it a step ahead of rivals including Google Inc. (GOOG) and Apple Inc. (AAPL), both of which are aiming to start similar services. Record companies have struck licensing deals with existing music-streaming sites, such as Spotify Ltd., Rdio Inc. and Music Unlimited, to help counter the effects of piracy and a drop in purchases of compact discs.

Cloud Player, which is bundled into the latest version of Amazon’s MP3 application, lets users listen to tracks uploaded into the Cloud Drive on Android smartphones, as well as on personal computers running Internet Explorer, Firefox, Safari for Mac or Chrome Web browsers.

Multiple Devices

The Cloud Player may prompt users of Apple’s iTunes who mainly use Amazon for music downloads to make a more significant move to the online retailer’s music services, said Eric Garland, chief executive officer of BigChampagne Media Measurement, a Beverly Hills, California-based music-tracking company.

“They designed everything they do in that category to work pretty much seamlessly with iTunes,” he said in a telephone interview. “They’re answering what I’m sure are their customers’ requests to make backup access to media and use of multiple devices a simpler and more transparent process.”

While customers of iTunes can also use Amazon for music downloads, the online retailer may have trouble diverting many loyal Apple users from music-playing software they’ve used for years, even in the face of extra benefits, said Russ Crupnick, an analyst at NPD Group Inc.

“It’s unlikely they’d desert Apple for Amazon cloud services, especially since you have to assume Apple won’t be far behind,” Crupnick said in an e-mail.

‘Big Battle’

Amazon is trying to garner consumer loyalty early on to gain a strong footing before moving to areas outside of music, said Ann Winblad, co-founder of Hummer Winblad Venture Partners, in a televised interview on “Bloomberg West.” The company is competing against Apple and Google not just in music, but to get customers’ entire hard drives on its cloud, she said.

“They are part of a big battle,” Winblad said. “Amazon just laid down the first announcement -- it happened to pick music today. It’s not so much about the future of the music industry as it is the future of my data.”

To contact the reporter on this story: Kristen Schweizer in London at kschweizer1@bloomberg.net; Danielle Kucera in New York at dkucera6@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net.

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