(Bloomberg) -- Amazon.com Inc. is giving subscribers to its premium music service one audiobook a month for free, following an offer that Spotify Technology SA, the biggest audio streaming service, began providing to customers last year.
“This about the evolution of Amazon Music Unlimited,” Steve Boom, Amazon’s vice president of audio, Twitch and games, said in an interview. The new offering will turn the platform into the “premiere, No. 1 audio entertainment destination.”
Features of the new offering announced Tuesday were designed to distinguish it from Audible, Amazon’s $14.95-a-month audiobooks and podcast service. For example, Amazon Music subscribers in the US, Canada and UK can listen to an audiobook but can’t keep it, as customers do on Audible. An Audible subscription provides one premium title a month, as well as access to additional podcasts and books.
“They’ve been designed to appeal to different segments,” Boom said.
The new offering will make the $10.99-a-month Amazon Music service more competitive with Spotify, which charges $11.99 a month. The Swedish streaming service offers 15 hours of audiobook listening a month, alongside music, podcasts and an increasing catalog of video content.
Audible membership is “literally at an all-time high,” regardless of the increased competition from Spotify, according to Bob Carrigan, the service’s chief executive officer. “Our business is as strong as it’s ever been.”
After launching its audiobooks offer, Spotify began classifying its service as a “bundle,” which allowed the company to pay a lower royalty rate to songwriters and music publishers. A rights collection organization is now suing the service over the change.
The National Music Publishers’ Association said it doesn’t expect Amazon’s new offering to lower songwriters’ payments.
“Amazon has engaged with the music publishing and songwriting industry in a respectful and productive way, unlike Spotify,” David Israelite, the organization’s president, said in an emailed comment.
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