The world's largest online retailer,
Amazon.com Inc
. (
AMZN
), recently launched a new music service, Amazon AutoRip, in a
bid to expand its Cloud music offerings to better compete with
rivals like
Apple Inc
. (
AAPL
) and
Google Inc.
(
GOOG
).
This new service allows anyone who has ever purchased an album
on Amazon to download a free digital copy. The music files will
automatically get saved on customer libraries at Amazon's
datacenters, available for download or play through Amazon's
Cloud Player.
Amazon's Cloud Player is a web storage application, which
allows people to listen to music from any computer or Android
device with Internet access. It allows streaming on devices such
as Kindle Fire, iPhone, iPod Touch, Mac and PCs.
Despite being the pioneer of facilitating music storage on the
Internet for access on any device, Amazon's Cloud Player is still
far behind Apple's iTunes. New rivals like Google as well as
streaming services such as Spotify, Deezer and Rdio have also
entered the market. According to the market research company, NPD
Group, in the second quarter, Apple accounted for 64% of U.S.
music sales online, followed by Amazon at 16%, Google at 5% and
other services making up the rest.
Amazon's strategy of offering users free digital copies of CDs
bought on its site makes its service more ambitious. This new
feature will bring in more users to the Amazon cloud, giving a
boost to its digital music sales and also drive sales of Amazon's
other digital goods.
Also, recently Amazon announced that its Cloud Player can now
stream music wirelessly through Roku streaming players. Amazon
offers Roku's customers free download of the Amazon Cloud Player
channel from Roku Channel Store for free.
Therefore, while iTunes still leads in the segment, Amazon's
tactics, its ongoing efforts and new ideas could help the company
pick up some market share.
Amazon is one of the leading players in the extremely
fast-growing retail ecommerce market and its strength lies in its
huge scale of offerings, its broad reach and platform approach.
While the strong growth prospects are making the market more
competitive, Amazon continues to maintain and even grow its share
on the back of its consistent and reliable services. In the third
quarter, Amazon's revenue of $13.81 billion were up, both on a
sequential as well as year-over-year basis.
Currently, Amazon retains a Zacks Rank #3 (Hold).
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