I think the main competition will be Amazon Music as I already have access to it due to my Prime account.
I have a Spotify subscription because Amazon Music didn't used to exist and now I am used to Spotify, but if I'm paying for Amazon Prime anyway then why not make the switch?
It's not "terrible." It's fine if you just basically want background playlists and don't want to pay for a premium service (from Apple, Google, Amazon, Spotify, etc.). But I agree that Amazon Prime Music isn't really a competitor to Spotify in the sense of using it to search for and play specific music.