In a report published Friday, Wedbush analyst Michael Pachter reiterated a Neutral rating and $330.00 price target on Amazon.com (NASDAQ: AMZN).
In the report, Wedbush noted, “Amazon announced Prime Music Thursday, an unlimited, ad-free, on demand music streaming service for Prime members. Similar to Spotify, the service will be on demand, but with far fewer songs available at launch.
"The service will be free and included as a benefit for existing and new Prime members. Prime Music appears noncompetitive compared to Pandora or Spotify. While we believe that the service increases the value of the Prime membership, and we expect Amazon to add to its music catalogue as it has with Prime Instant Video over time, we do not think that the initial offering is sufficient to induce subscribers of these other services to switch.
"Currently Prime Music's catalogue of over one million songs is much smaller than Spotify's over 20 million songs and will not be considered a substitute for Spotify users. Pandora has only around 1 million songs, but provides music discovery, something that Prime Music appears to lack.”
Amazon.com closed on Thursday at $328.92.
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