Report: Amazon Nearing Launch of Alexa Paid Tier

Amazon reportedly plans to launch a paid tier of Alexa as soon as this month.

The paid tier will offer a version of the voice assistant that has been dubbed “Remarkable Alexa,” is built on a new tech stack and offers greater capabilities, The Wall Street Journal (WSJ) reported Tuesday (July 23), citing unnamed sources.

Remarkable Alexa will incorporate more generative artificial intelligence (AI) than the current version of the voice assistant and will provide users with more seamless control of smart home devices by using their voice, according to the report.

“Alexa is about to get a lot smarter,” Jeff Bezos said in December 2023 during a podcast interview, hinting that a new version may be on the way, per the report.

The company has not yet determined a price for the new paid tier, the report said.

The development of Remarkable Alexa began when Amazon CEO Andy Jassy urged teams to find a way to monetize Alexa and Amazon’s Echo speakers, according to the report.

Currently, although hundreds of millions of people own Alexa-enabled devices, the Echo speakers are not delivering a payoff for the company because people are using them for free apps, the report said.

Jassy’s effort to monetize the devices and the voice assistant mark a change from Amazon founder’s Jeff Bezos’s strategy to develop devices based on “downstream impact,” or DSI, per the report.

That strategy allowed selling devices at cost or at a loss if they generated sales down the line — as when the sale of a Kindle eReader leads to the sale of eBooks to read on that device, according to the report.

The DSI strategy has not paid off in the case of Echo because customers have used it primarily for free services such as checking the weather rather than to place a meaningful amount of eCommerce orders, the report said.

An Amazon spokeswoman told the WSJ that the company’s devices business has established profitable businesses and is prepared to continue doing so, per the report.

“Hundreds of millions of Amazon devices are used by customers around the world, and to us, there is not greater measure of success,” the spokeswoman said in the report.

Amazon has been clear about its intentions to charge a subscription for a tiered Alexa service since September 2023, and improvements to voice technology driven by AI may force the issue, PYMNTS reported in April.