Amazon to launch a free, ad-supported music service, sources familiar with the intensifying its competitive threat to global streaming leader Spotify.
The world’s biggest e-retailer would market the free music service through its voice-activated Echo speakers. To obtain licenses for the free music, Amazon has offered to initially pay some record labels per stream, regardless of how much advertising Amazon sells.
Currently, Spotify Premium is the only major subscription-dependent music streaming service with a free tier a generous offering that’s been key to it hooking and funneling in new paying subscribers.
The free service offered by Spotify, which currently counts 96 million paying subscribers and 116 million free users, is attractive because it lets listeners hear particular albums or artists on demand, though free users can’t control the order of the songs.
Amazon hasn’t disclosed how many paying music subscribers it has, but some reports last year estimated it counts over 20 million subscribers across its offerings and expect it to gain steadily thanks to integration with its market-leading smart speakers.