Online storage: There is not much new here. You get 5GB online storage for free and can manage it via a web browser (upload files, manage files, download files). 20GB cost $20 per year.
The new feature: When you buy MP3 music on Amazon, you have the option to upload it to your cloud drive. There is a music player for the MP3s on your drive (webapp or Android app, no iOS app). You have to be online to use it. On the other hand, they won’t occupy space on your hard drive. This feature would be really appealing for videos.
If you buy an MP3 album, you are upgraded to 20GB storage space for a year. If you already have 20GB, you get $20 credit.
The competition:Dropbox and SugarSync are much more capable. They have apps for Windows, Mac OS, and iOS that allow you to synchronize your cloud files, so you can access them even when you are offline. You can also go back to older versions of a file.
Licensing: It is still not entirely clear whether Amazon actually has the right to stream the music. Publicly, it says it is allowed to do so, behind the scenes, there seem to be negotiations . I’m sure Apple and Google are glad to let Amazon take the lead here.