Friday, January 11, 2013

Improved proposition gives differentiation

Amazon have just announced what appears to be a great differentiator in a crowded market which should give a more compelling proposition to customers. Only available in the US at the moment but they are offering a free cloud based mp3 version of music customers have bought on CD from Amazon since they started business in 1998. 

Amazon are competing against Apple and Google for the cloud storage business of customers, and I would suspect many customers will largely use one facility predominantly, this gives Amazon great advantage as suddenly their customers already have the music they have purchased available on CD during the past 15 years available in the cloud, so why not build on that supplier facility to store anything else. In addition, when purchasing music in the future, buying a CD from Amazon will mean it is available as a download in addition to the physical version without any effort required. 

Despite Apple and Google not offering physical CD sales (something I saw recently indicated that something like 60% of music is still sold on CD rather than as download) the market is still huge and Amazon get the best of both worlds with this new offer, as do their customers.

A great bit of lateral thinking from Amazon which could easily give them great advantage in the cloud music market which is still in the early growth stage. I'm looking forward to it coming to the UK, and as a personal plea to Amazon, please do the equivalent with Kindle books - I would love physical copies of many that I have on my Kindle but don't want to pay twice!

More information about the story is available here