Amazon's Retail Strategy Needs a Soundtrack

NEW YORK (TheStreet) -- While I've never had a problem with Amazon.com (AMZN) ripping off other people's ideas, it's starting to get a bit old. And there's more than a halfway chance the approach could produce diminishing returns if it hasn't started to already.

Granted Jeff Bezos can claim the wholesale redefinition and disruption of retail, expanding Sunday delivery via the USPS and forthcoming package drops by drone as his own, but he's lifted pretty much everything else.

Amazon Fresh -- that's a Webvan knockoff.

Paying people to quit -- that's an aqui-idea (my word, trademark pending) courtesy of Zappos.com.

Outside of the Kindle e-reader, Amazon's actual and rumored pieces of hardware have been little more than knockoffs. You can argue Kindle Fire came on the heels of the e-reader, but it was just a response to Apple's (AAPL) iPad. As much as I love Amazon's Fire TV, it's still an answer to Apple TV, the Roku player and similar devices. If Amazon does a smartphone, same deal.

It's not much different in consumer-centric software and services. Online video -- Amazon's taking on Netflix's (NFLX). And -- soon -- Amazon will take pretty much the free world's lead and do some sort of streaming music service.

The argument that these initiatives -- across hardware and software/services -- build Amazon's ecosystem, make Amazon Prime more attractive (in some instances) and ultimately drive e-commerce sales is a good one. I've made it so many times there's no need to provide a link. However, if you're a fan of Amazon -- as a consumer service, company and stock (I'm still long-term bullish) -- you've got to be longing for something more. Something that changes the game and, in turn, has an even bigger impact on Amazon's core revenue stream.

There's an opportunity for Amazon to do this with its forthcoming streaming music service. We know it's coming. Amazon has sent out an Apple-like take-it-or-leave-it contract to independent record labels. And, in light of the potential Apple-Beats Electronics deal, it might make sense for Amazon to expedite whatever plans it has. I just want the result to be more exciting than what we saw with, say, Fire TV, where a couple extra features begin and end the hype.

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While it remains to be seen how effective it will be, the recent partnership that lets Amazon customers put items in their cart via Twitter (TWTR) provides hope that there's a modicum of thought at Amazon beyond kicking retail's losers while they're down and following pop technology trends. If there's any place where Amazon can continue to tunnel this trajectory to more innovative ground it's by using streaming radio for some other ends than to play music, pay royalties and add (perceived) value to Amazon Prime.

I provided some color earlier this year on how this might look in Amazon Music Could Be Songza:

Songza aims to provide the perfect advertisement and, quite possibly, the ideal e-commerce opportunity for what you're doing, thinking, feeling.
The idea is that music acts as the soundtrack for people's lives -- from big think, all-encompassing and day-to-day activity standpoints. That's at least how it was explained to me last year when I did some digging and talked to people about Songza's plans.
It's not there yet, but that's the thought process behind the ongoing evolution. And what better way to get there than having Amazon put the full power of its beast behind you.
Plus, if the aforementioned model isn't right up Amazon's alley, I'm not sure what is.

The looks less and less like that'll actually happen, the more and more I think about it and wonder why.

If you're Amazon and you're going to get into some flavor of music-driven streaming media, it seems to me you risk underwhelming both Wall Street and consumers with some tired iteration of Google (GOOG) Play on the on-demand side or Pandora  (P) or Apple's iTunes Radio on the radio side. How much value is that really going to add to Prime? I can't imagine droves of people dumping whatever they're using now to use whatever Amazon puts out. However some will use Amazon's offering along with what they're already using -- especially if they're already Prime members -- and even more bodies will at least check it out if there's a distinctive wrinkle.

This is probably the most boring video I'll ever embed in an article, but it's apropos to the conversation. In it the president of the Songwriter's Guild testifies before Congress in favor of better compensation for songwriters. I'm on board with him, but it's the music sells everything message he delivers at the beginning of this clip you need to pay attention to with respect to Amazon. It's only a few seconds long:

Whether it's via Songza, doing something Songza-like (another knockoff!) or something all together different, it would be nice to see Amazon find some sort of e-commerce tie-in for its forthcoming streaming radio service. Something nobody has done yet. Something that creatively and respectfully marries the association between music as everything from a soundtrack to the background in our lives with our penchant to buy stuff online. Our tendency to make impulse purchases while surfing Amazon and listening to music. Some type of thoughtful integration of the Amazon e-commerce platform with its streaming radio interface.

If anybody can pull this off, it might be Amazon. And it would make a much larger and more meaningful splash than the introduction of another Pandora killer that has zero chance of killing Pandora. Plus it might provide a different path for every type of Amazon customer (prospective, light, emerging, heavy Prime user, etc.) to buy stuff from the top dominator that doubles as an imitator in retail/technology.

--Written by Rocco Pendola in Santa Monica, Calif.

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Rocco Pendola is a full-time columnist for TheStreet. He lives in Santa Monica. Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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