Amazon has launched a free tier of its music streaming service in the US that is ad-supported and available to use through the company’s Echo speaker and other Alexa devices. Billboard first broke the news about this free option earlier this week, and the tier went live today.
This new version gives access to a selection of ad-supported top playlists and stations for free on compatible Alexa devices. Previously, the only ways to access Amazon’s music offerings were to buy a Prime membership, which has Prime Music bundled in, or to separately pay a monthly fee ranging from $3.99 to $9.99, depending on the tier.
This launch puts Amazon in direct competition with Spotify. Until now, Spotify was the only on-demand music streaming provider to offer both a free, ad-supported tier and ad-free subscriptions. Spotify’s free version does offer access to more music, but Amazon has other benefits to tease in front of consumers — it could use this free option as an incentive to bring more people into its broader ecosystem, including its Alexa-powered family of Echo and other smart home devices and its Prime membership.
Music streaming is a fast-growing section of Amazon’s business; last year a representative told The Verge that Amazon Music has tens of millions of active subscribers. But, like many early aspects of Amazon’s business, it’s a loss leader for the company that allows to aggressively capture market share.
Amazon now makes a majority of its profit through its cloud computing division, Amazon Web Services. That allows it to offer benefits like Amazon Music at a loss in hopes consumers eventually spend in other ways, be it an Echo speaker, Prime subscription, or in simply buying more stuff from Amazon, an increasing amount of which is produced by the company itself under its own name or other white label brands.