Spotify shares slid in early Monday after a report said Amazon has entered into discussions to launch a free music service to compete directly with the streaming platform.
The new service sounds a lot like Amazon Prime Music, the music selection you get as part of a Prime subscription - only in this case you'd have to listen to ads instead of signing up for Amazon Prime. Spotify is now the only music streaming platform that markets a free-tier of service (other than internet radio services like Pandora or iHeartRadio). Key to the new service - assuming it actually launches - will be Amazon's hardware products, specifically the Echo smart speaker models.
The alleged free music service would be made available through the Amazon Echo smart speakers, the leak claims.
However, the service would not be expected to have as extensive a catalogue as a service like Spotify.
Spotify is now the only music streaming service that offers a free, ad-supported option, and this version has more users (116 million) than its paid alternative (96 million). Both Spotify and Pandora give users access to free content, though the latter comes in the form of "radio" that greatly limits the experience. Right out of the box users would be able to start playing music without making any payments or signing up for another service.