An email came in from Amazon Prime announcing that they’re adding Amazon Music to the Amazon Prime bundle.
Without knowing anything about the internal rationale, this feels like a smart move.
My guess is that this wasn’t a big money maker for Amazon – likely a rounding error relative to Amazon Prime. And this move enables them to do 3 things at once –
(1) Win customer loyalty – at a time when most subscription services are working on ways to increase prices, Amazon has chosen to go the other way and make an already valuable Prime subscription more valuable.
(2) Simplify their SKU line up and focus any and all sales on the Prime product
(3) Increase the value of the Prime bundle so that it is easier to raise prices on Amazon Prime later. It is likely that increasing the value of the Prime bundle by $1 will give them orders of magnitude better RoI vs. attempting to sell Amazon Music separately.
More is not always better.