Michael Seto/Business Insider
While Spotify, Apple Music, and even Tidal get the buzz, Amazon's Prime Music has quietly become a hit, especially among older Americans, according to research by Cowen.
In a recent analyst note, Cowen's John Blackledge and Tim Arcuri wrote that 16% of US respondents to a proprietary survey said they had listened to music on Prime in May, 2016. That put Amazon Music as the second most used "paid" service, behind satellite radio at 22%, and above Spotify's paid tier at 7% and Apple Music at 6%.
Here is the full chart:
Cowen
One driver is that Prime Music is a particular hit with older age groups, according to the analysts. "Prime Music was the only on-demand streaming service to crack the top five of the main sources of music for the 4 age cohorts 35+," they wrote.
"Given the increasing competitiveness within the on-demand streaming industry, focusing or 'owning' a specific niche, like a particular age group, may not be a bad strategy," they continued. "It is unclear if this has been Amazon's strategy or the byproduct of its Prime member base."
Cowen's findings continue a narrative of sleeper success for Prime Music. Earlier this year, Amazon said that in Q4 of 2015, Prime Music streaming hours "more than tripled" in the US compared to Q4 2014. And though it doesn't have the pop culture recognition of Spotify, Prime Music has snagged some devoted fans, including my colleague Jillian D'Onfro.
This success could be one reason Amazon is reportedly building a full-scale competitor to Spotify and Apple Music. Currently, Prime Music's "over a million" songs is tiny compared to Spotify's 30 million. But the company is rumored to be readying a service that includes all the major labels, and will cost $9.99 when released in "late summer or early fall," according to Reuters.
Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.