Ever since Amazon upped the annual fee of Amazon Prime from $79 to $99, everyone's been wondering what else the company would be adding to that service. For many of us, that order things from Amazon all the time, we didn't see the big deal since it hadn't increased in over 8 years, while shipping fees had. On Wednesday, The New York Times posted that the company might be announcing this new streaming music service as soon as this week. This is according to a few people that were briefed on the company's plans. This has been rumored in the music industry for a few months now, and would give Amazon Prime subscribers access to thousands of songs instantly. It would be free, and free from ads and other interruptions. However, it would not have the latest releases, which could turn out to be a major downside for the company. It will also not include the catalog from Universal Music group, which is a big con on the list of pro's and con's for Amazon's streaming music service.
Negotiations between labels and Amazon began about 6 months ago, but were slowed down recently due to some of the labels thinking Amazon is low-balling them with financials. "Amazon told most small labels that in exchange for one-year licensing agreements they would be offered shares of a $5 million royalty pool, to be divided by a market-share formula of Amazon's choosing", says the NY Times source. Bigger labels and distributors were offered bigger deals, obviously. And Amazon had set aside about $25 million for deals for this new streaming music service.
Sony and Warner Music have already signed deals with Amazon, but the third major record label, Universal Music has not yet signed a deal with Amazon. Universal includes artists like Kanye West, Lady Gaga and Katy Perry. Now Amazon does have an event next week in Seattle. We might see this service announced at that event along with the Amazon smartphone, or it may launch ahead of that announcement. We are unsure. But The New York Times says that the service should be announced this week. So we'll keep our eyes out for that.