Amazon’s Opportunity — MP3 Storage and Streaming to Handsets

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Yup, I’m having one of my “ahead of the curve” moments today. Feel free to reign me in with the realities and limitations of today’s technology, but I still think that Amazon is missing a huge opportunity when it comes to digital audio on the handset. As it stands now, you can purchase music directly from the Amazon MP3 store on a Google Android or Palm webOS device. And you don’t even need a fast Wi-Fi connection — on my Palm Pre, I’ve purchased whole albums over 3G once the client was updated to support that. But our phones ultimately have limited storage and there’s the whole sticky synchronization challenge that doesn’t need to be in the way, or tie music to a particular platform or device.

Although my initial thought on this was back in May, I expanded upon this solution in a recent piece over at our GigaOm Pro subscription service and while the technology may be lagging, the business model could easily be there. Amazon already has the storefront and a mobile client for purchases. Why can’t S3, Amazon’s Simple Storage Service, be my music library in the cloud where I could have near unlimited storage? From a cost perspective, it would take $6.70 to initially transfer and then store the music for a month, using currently available S3 pricing. To stream 3 GB in a month — more than most people would likely do — would be about a half-dollar, plus another $3 for the monthly storage. Amazon could even “hide” the transfer prices in the cost of MP3 files, much as they do for Kindle content.

Again, there’s the dratted technology limitation, which in this case is the required mobile web connection. Wi-Fi still isn’t everywhere and 3G won’t meet everyone’s needs either — there are still those pesky 5 GB monthly bandwidth caps, not to mention coverage gaps. But I think a non-persistent wireless connection could be mitigated by Amazon themselves. Slacker Radio for BlackBerry caches music in cases like that, so why couldn’t Amazon build the same functionality in a handset client? Like I said, they already have a client for purchases and transfers — adding a music player with caching ability is the next logical step to me.

The benefits are there — leaving behind physical phone storage limits, no more synchronizing, and having your entire music library available on potentially all of your devices. Does the idea have enough merit for the future?

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