Amazon Launched Prime Music Without Universal Music Group Catalog

| Analysis

Amazon launched Prime Music, its entry into the burgeoning streaming music market, this week, but the company did so without the biggest catalog of music on the planet, Universal Music Group. That means artists like Lady Gaga, 50 Cent, The Who, Kanye West, Amy Winehouse, Johnny Cash, and...wait for it...Dr. Dre.

Ouch

That last artist, Dr. Dre, may have rung some bells in your Apple-centric mind. because he's the cofounder of Beats Electronics and one of Apple's newest executives. He's also signed to Interscope, a record label cofounded by his Beats cofounder Jimmy Iovine.

That's a lot of cofounding, but the point is that Interscope is a big part of Universal Music Group. It has new ties with Apple in that Jimmy Iovine is not only a long-time Apple evangelist in the music industry, but the other newest Apple executive. And, it turns out, UMG didn't sign with Amazon and won't be a part of Prime Music.

That leaves Amazon at a significant disadvantage. Amazon Prime launched with a million songs, but it doesn't include all or part of the music catalogs created by a long list of popular artists. When you're going up against Spotify, Pandora, iTunes Radio, Beats Music, and a host of other services who do have UMG acts in their offerings, customers will notice.

Forbes staffer Zack O'Malley Greenburg opined in an excellent piece that there could be several reasons for this. For instance, UMG may have wanted more money than Amazon was willing to offer—and we're seeing what king of hard ball Amazon can play when it comes to terms. On the other hand, it might also have been the influence of Jimmy Iovine within UMG.

I'll throw in another theory: UMG might have looked beyond the up-front payment offered by Amazon—as much as $50 million—to see how having its music catalog tacked on as a me-too freebie for Amazon Prime customers will only serve to devalue its product over the long term.

The reality is that it was probably a number of factors. If Amazon ponied up enough money, UMG would have taken it, and no amount of influence from Jimmy Iovine could change that.

No matter how it happened, though, Prime Music might better be called Crippled Music. Without UMG's catalog, many customers will find the service wanting.

No Comments

Log-in to comment