Spotify Technologies S.A. (NYSE: SPOT) tumbled by 5% on Monday after Amazon.com, Inc. (NASDAQ: AMZN) announced its free music service will be available for customers using the Amazon Music app.
Spotify shares continued to edge lower by 2.4% on Tuesday morning.
Amazon said in its blog post that Amazon Music customers “who do not yet have a Prime membership, or a subscription to Amazon Music Unlimited, can now listen to an ad-supported selection of top playlists and thousands of stations for free on their favorite devices.”
Previously, the service was only available to customers on Echo devices, but Amazon has now expanded its service to customers using the Amazon Music app on iOS, Android, and FireTV devices.
Now, customers in the U.S., U.K., and German will be able to enjoy music with no subscription or payment required.
A free music streaming service could threaten Spotify, considering almost half its users are paying members. In the third quarter, Spotify reported a total of 248 million monthly users, representing a 30% increase year-over-year. However, only 113 million were paying subscribers, which increased by 31% year-over-year.
Amazon mentioned in its blog post that playlists and stations such as All Hits, Fuego Latino, Country Heat, Holiday Favorites, and Rap Rotation will be available to customers.
On the other hand, Amazon Prime customers could access more than two million songs ad-free as part of their membership, but can upgrade to Amazon Music Unlimited for USD 7.99 per month or USD 9.99 for customers who do not have Prime.
Amazon also recently released its Amazon Music HD, which costs USD 12.99 per month for Prime subscribers and USD 14.99 for non-members. The service provides higher quality music, including 3D audio that works with Echo Studio.
Written by Bryan Shin.
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