Billboard reported Amazon to be setting up a music service that supports ads, but Amazon declined to respond.
If the company proceeds as suspected, the new service could be released in a few weeks and would stream music through Echo speakers by voice commanding Alexa to play the tune.
As it is, the company already offers Amazon Prime music services that are free to subscribers of the Prime package that offers free shipping and video streaming. There is also another package going for $7.99 per month with unlimited access to music and a discount for subscribers.
By going after a model that supports ads, Amazon will be aiming at Pandora and Spotify which, according to Billboard, have a combined 220 million paying subscribers. Spotify has over 116 million people on its free service that supports ads- the company is struggling to make profits, but it is the largest music service in the world.
At the moment, some Spotify users can play music using Alexa but only on limited Echo models. Google Home also makes accommodations for Spotify and another music service on smart speakers.
According to Billboard, Amazon has the potential to use music as a loss-leader to improve other parts of its retail sales. Meanwhile, a free music service from Amazon that will respond to Alexa will boost the sale of Amazon Echo speakers.
Last month, a report on Bloomberg news said that the company regularly listens in on people’s private talks. It admitted to doing so, but Amazon said it was trying to help Alexa to recognize voices. Other times Alexa will blurt phrases or lines randomly.
Nonetheless, another report by Canalys states that by 2021, people will have more smart speakers than they will have tablets. The smart speaker adoption will grow to 208 million in 2019, and 500 million in 2023 suggesting that these speakers may become a potent advertising tool.