Dive Brief:

• Amazon is launching a standalone $5 a month streaming music service for Echo, according to a report by Bloomberg, joining a crowded market that includes Apple Music, Spotify, Tidal and internet radio like Pandora.
• The initiative would boost the Amazon Echo's smart home technology in advance of the holiday shopping season. The price point for the service is a cut below most competitors, positioning it as a potential loss leader for Amazon.
• The Echo device is a natural fit for streaming music, and the announcement follows recent rumblings that Apple might be investing in Echo-like hardware, which would likely be integrated with Apple Music. 

Dive Insight:

Streaming music subscriptions have been majorly bolstering the music industry where physical sales and individual downloads are failing, if RIAA's recent midyear report is to be believed. It’s a testament to Amazon’s newfound cash reserves — thanks in part to things like its cloud computing tech —  that the company can risk taking losses in the overcrowded, highly competitive streaming market largely for the sake of the Echo, its premiere hardware product.

Amazon Prime members already have access to the streaming service, but a low cost option coupled with tech that easily delivers a home listening experience could be a winning combination heading into what's sure to be a busy holiday season.

Whether or not Amazon decided to go forward with broadening its music streaming options due to the recent Apple rumor is purely speculative, but the revamped Echo will certainly give Apple a run for its money if that hardware comes to fruition in the coming months. 

The move is the latest sign that digital assistants for the home are heating up to be a big category for digital platforms. Google recently released the Allo app as part of a bigger push around digital assistants.