Amazon Prime costs $119 per year, while Amazon Music Unlimited is priced at $9.99 per month. Prime Members have low-cost access to Amazon Music Unlimited, as Amazon charges a discounted $7.99 per month price for those who want to listen on any device or $3.99 per month for those who only listen on an Amazon Echo. Amazon does not currently offer free listening options.
According to Billboard, the new ad-supported music service will join Amazon's existing services and will be marketed through the company's voice-activated Echo speakers. Like Prime Music, it will have a limited catalog.
Offering a free ad-supported music tier would put more competitive pressure on Spotify, one of the few music services that has a free music option. Other competing services, such as Apple Music and Tidal, are subscription only and do not offer free ad-supported listening.
To score deals with some record companies, Amazon is offering to pay per stream, regardless of how much advertising is sold.
Spotify uses its free music tier to draw in new paying subscribers. Spotify has around 116 million free listeners and 96 million paying customers, while Apple Music, a major Amazon and Spotify competitor, has 56 million paying subscribers. Amazon has not provided details on how many paying subscribers it has, but estimates have suggested the total might be somewhere around 20 million.
Amazon could be planning to launch its new ad-supported free streaming music service as soon as next week.