One-Fifth of a Percent? A Closer Look at Amazon's Prime Music Launch

Amazon broke with tradition Monday and released some statistics on early adoption of its new Prime Music service. Although vague, the numbers seem to suggest Prime is off to a decent start. But, again, the numbers are vague.

Launched June 12, Prime Music is a facet of Prime, a paid service that gives Amazon members free, two-day shipping as well as access to Prime Video, a Netflix knockoff with a growing catalog of movies, television shows and original programming.

What we're told in Monday's press release that Prime members have streamed "tens of millions of songs" equaling "millions of hours of music" and added "tens of millions of songs and more than a million Prime playlists" to their Amazon.com music libraries.

No, Amazon's press release doesn't say much. But the fact that Amazon bothered to put out a press release suggests the company is pleased with Prime Music's adoption. Companies -- especially Amazon -- tend to be carefully measured when communicating status updates.

A good rule of thumb in digital music is a company will rarely pass on an opportunity to release positive sales numbers, subscriber numbers, or activity levels. A lack of press releases or public disclosures can be telling. Simply put, if a company isn't bragging, there probably isn't much to brag about.

The challenge is to put Amazon's press release into context. We know 20 million songs with an average length of 3:30 equals 1.17 million hours of music. So for Prime members to have streamed "millions" of hours of music (literally meaning two million or more hours) there needs to have been 35 million songs streamed.

Given available numbers, we know Prime Music accounts for a tiny fraction of U.S. music streaming. According to Nielsen, 3.13 billion songs were streamed in the week ending June 15. But that number excludes Pandora, which streamed 1.73 billion listener hours in May, as well as iTunes Radio and some other popular Internet radio services.

Adding Pandora's activity to Nielsen's number, and assuming the average Pandora song is 3.5 minutes in length, Prime Music currently accounts for 0.2% of music streaming in the U.S. Add iTunes Radio and other services not tracked by Nielsen and Music Prime's share becomes smaller.

We don't know quite a bit about Prime. Amazon has about 20 million Prime members worldwide, a number that dates back to January, but Amazon has not specified the number of U.S. Prime members. We don't know if streaming activity has fallen after an initial burst of curiosity or if Prime Music has encourage repeat listening. Nor do we know specifically how many songs were streamed by how many people.   

But we know, or rather we can reasonably assume, Amazon believes Prime Music is off to a good start. The other option is Amazon is either disappointed or indifferent to Prime Music's adoption and put out a press release just to fool with people. The latter would be a great act of PR game theory, but the former seems like the better explanation.