Amazon in talks for ad-supported music service to compete with Spotify

Amazon is planning to market its free music streaming service through its Alexa-powered Echo smart speakers

Amazon.com is reportedly in discussions to launch its own ad-supported music service offering, which can help strengthen the competition with music streaming leader Spotify.

Allegedly, Amazon is planning to market its free music streaming service through its Alexa-powered Echo smart speakers. The service could become available for customers within this week.

Sources familiar with the matter mentioned that presently, e-commerce leader Amazon offers its Prime Music services under the subscription of its Amazon Prime membership, which is priced at $119 per year. The Prime membership also offers the customers of Amazon access to the Prime Video service and free delivery of products.

The company is also selling a subscription for Amazon Music Unlimited at a rate of $9.99 per month, being offered to Prime members at a slightly lower monthly fee of $7.99 for those who wish to listen to music on any device, sources informed. For users who only want to access Amazon Music Unlimited on an Echo devices, the subscription fee is just $3.99 per month.

It has been indicated that to land major deals with some of the record companies, Amazon has offered to pay them per stream, regardless the amount of advertising sold.

Market reports show that Spotify shares had fallen 4% following the information about Amazon’s plans for ad-supported music service. Sources confirmed that as of February 2019, Spotify had 96 million paid subscribers and 116 million ad-supported users, while millions of paid Amazon Prime subscribers also listen to Prime Music and its Amazon Music Unlimited services.

Seemingly, the shares of Sirius XM Holdings, a satellite radio company, also witnessed a 2% drop at %5.97.

Another major competitor of Spotify and Amazon, Apple Music, boasts of 56 million paid subscribers, sources added. Though Amazon has not revealed the number of paid subscribers it has, it is estimated that this number could be around 20 million.