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Rumors shed more light on Amazon set-top box, Prime music service

updated 07:41 am EDT, Wed March 12, 2014

Fixed $30M licensing pot a sticking point for music executives in Amazon negotiations

More rumors for fabled Amazon services have surfaced, with three different outlets claiming to provide more information about the Prime music service and its long-rumored streaming device. The latest claim for the music service, thought to be offered as part of the Prime delivery subscription, sees the company limiting the number of plays of a track, as a means to increase its MP3 sales.

The Wall Street Journal's sources believe the service, which will apparently raise the Prime cost from $79 to as high as $119 per year, would prevent a track or album from being listened to once it reached either a set number of plays or for a limited amount of time. By shutting down access to a song, this in theory would push the subscriber to buy the track itself, a likely prospect if they have listened to it enough times to get it blocked.

Amazon Cloud Player
Amazon Cloud Player

As to how record labels will be compensated for this, Billboard claims Amazon is offering a "take-it-or-leave-it" pool of funds for song licensing, paid in a pro-rata basis. The total pool of a claimed $30 million per year is divided into a $25 million pot for the major labels and a $5 million version for independents, something said to be described by insiders as "derisory." A record label executive is said to have queried why Amazon will pull in $20 to $40 extra per Prime subscriber, yet will give independent labels a fixed $5 million pot, claiming it to be "insane." Another major-label executive is apparently worried that the service could potentially take revenues from other streaming services, but a third executive claims Amazon is willing to negotiate a higher payment pot.

Amazon's set-top box, which has been previously described as an Android-based game console, is said by GigaOM to ship with Netflix and Hulu Plus onboard, as well as Amazon's own Instant Video and Prime Instant Video. It will also apparently ship with a remote control, and also offer support for the DIAL multiscreen protocol, allowing mobile apps to launch videos from the device in a similar way to Google Chromecast. The launch date remains unknown.

by MacNN Staff



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