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Summary:

Will music services win if they get access to tracks a week ahead of their competitor? Amazon doesn’t seem to think so, and it may be on the right track.

Beats Music got a lot of press Monday for nabbing the exclusive rights to a track that features Jay Z. The deal was seen by some as a sign that Beats may take a cue from Netflix and battle competitors like Spotify with exclusive content deals. But the future of music subscription services isn’t about exclusive deals — it’s about binging.

What that Jay Z track is all about

First, it’s worth putting that Jay Z exclusive into perspective: Beats Electronics, which got recently acquired by Apple, started to air a new World Cup-themed ad dubbed The Game before the Game earlier this month. The ad, which features raps by Jay Z, quickly became a hit online, and has already amassed more than 10 million views on YouTube.

This week, Beats Music started to stream a remix of the track used in the ad. Beats got access to that remix a week before it appears on competing music services, which led Billboard to muse that exclusives could become key to Beats Music’s strategy going forward. The Verge assumed that it would be “impossible for any other service of its size” to get these kinds of exclusives.

Except it’s not impossible. Exclusive access to tracks or even entire albums a few days before the competition gets its hands on them is something that music services have been doing for a long time to differentiate themselves in a world where every service offers access to the same 30 or so million songs, for the same price, on the same devices.

Rdio recently got an exclusive Snoop Dogg track. Spotify at one point had an exclusive remix of Daft Punk’s Get Lucky. Jay Z distributed his latest album Magna Carta Holy Grail exclusively through Samsung for 72 hours before it hit the stores last summer. Deezer, Google Play and everyone else is also experimenting with exclusives all the time, but thus far, none of those one-off deals have moved the needle for any of these services.

Netflix didn’t start with exclusive content, but with a large back catalog

There’s still something that music services can learn from Netflix — and Amazon may have been the first to take notice. Netflix owes a lot of its success to binge viewing, allowing its users to burn through entire seasons of TV shows at their own pace. Binge viewing has defined how Netflix releases its own exclusives, with all episodes of new seasons becoming available at once.

But before Orange is the New Black and House of Cards, there were Lost, the West Wing and Battlestar Galactica — older shows that allowed people to discover things they missed on TV, re-watch their favorites and expand their pop culture horizon. What fueled Netflix’s initial growth wasn’t the latest shows that were on TV last night, but convenient access to the classics without breaking the pocket book.

That’s exactly what Amazon is now offering its Prime subscribers. Amazon’s newly launched Prime Music service also doesn’t have the latest and greatest. It only has about one million titles, compared to the 30 million that Spotify is offering its customers. Of course, one million is just about as much as Pandora has, and its more than 70 million monthly active users don’t seem to mind.

There are a lot more casual listeners than hardcore music fans

I believe Amazon’s Prime subscribers will be equally forgiving. That’s because Prime Music doesn’t target the hardcore music fan with a Spotify subscription and a big iTunes library, but the millions and millions of casual listeners — people who tune into Pandora but would love to listen to entire albums every now and then as well. People in their thirties and older who haven’t significantly changed their taste in music since college. People who haven’t been buying a whole lot of music in recent years.

There are a lot of those folks out there — a lot more of them, arguably, than heavy music buyers — and those casual listeners couldn’t care less whether a single new track is exclusively on one service or another. What they are interested in is rediscovering the classics, and listening to them on their own terms. In other words: binging.

Of course, that’s what every subscription music service offers, but unlike others, Amazon isn’t charging $10 a month for it, or subjecting users to ads, while still offering full on-demand access. Which is why its focus on inexpensive access to archives may be a lot more successful than spending a lot of money on a handful of exclusives here and there.

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8 Comments

  1. I wonder when they will feature my music?
    Leslie

  2. RoTimi Akinmoladun, MBA (Top-Linked)(6,500K+) Monday, June 16, 2014

    I think that you are dead on with your assessment of this situation. As a 30+ yr old, I totally related with your assessment of the “casual music listener”.

  3. ¯_(ツ)_/¯ Monday, June 16, 2014

    Not sure I’d classify putting a playlist on during the workday as “binging” exactly, that has somewhat obsessive connotations, but people have been listening to the radio at work for as long as I can remember.

    Now that we can customize our “radio” these services are taking the place of it. It’s never going to be about exclusives, only convenience.

    Beats won’t win for me until it can scan my own personal library and integrate what I have purchased with what I haven’t and give me the full run of my music. Until it does, they can buy all the exclusives they want, and I’ll just pay money for them when they’re out somewhere else and put them in my Spotify library.

  4. Exclusives matter. Amazon has been pitching an advance Willie Nelson exclusive stream for days.

  5. Richard Altman Tuesday, June 17, 2014

    so i noticed you don’t mention cars or automobiles, binge listening will happen only there. you’re welcome subsidata programs will be the norm

  6. Smart analysis Janko. Exclusives are extremely important to the music industry and completely worthless to the services. They consistently underperform in terms of listens, attracting potential subscribers or gravitas for the services, especially if sprinkled in one single track at a time and are just remixes or alternate versions. If a service could consistently get early access to albums coming out, they could potentially find some white space, but services have consistently lost out to either 1) retail services–primarily iTunes and 2) editorial promotional spots like NPR Music’s first listen program.

    Jon Maples

  7. I’ve been checking out what is available. There is some current stuff. i.e Daft Punk is available.

    But if you are into country and/or older stuff … Jason Aldean, Survivor, Aerosmith …

    Also, as noted other places, Amazon lets you download. Which is great if you don’t have a connection (i.e. you have Sprint) or don’t wanna waste your expensive bits (i.e. you have Verizon).

  8. I am an avid Prime user, and I pretty much buy all of my music in physical form, so I mostly see this as a positive as it allows me to evaluate product in an easier manner. I especially like the offline option that allows me to take the music with me when I don’t have network access.

    With that said, the catalog is weak for those of us that like to wander outside of mainstream, and I really don’t like the User Experience of having to add it to my library then go listen to it. I can understand why they did it this way, but I don’t have to like it.

    Overall, it is great start and if they will continue to grow the catalog and simplify the User Experience, then it will be a truly great offering. It has already lead to several purchases on my part, so I hope others are being driven in the same way because that will drive investment.