Spotify takes a hit after report says Amazon is exploring a free music service
- 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.
- Billboard, citing sources familiar with the plan, said Amazon would market the service through its Echo speakers and offer a limited catalog.
- The service could become available as early as next week, Billboard reported.
- Watch Spotify trade live.
Shares of the streaming-music service Spotify fell nearly 4% early Monday after it was reported that Amazon was looking to launch a free music service that could arrive as early as next week.
Billboard, citing sources familiar with the plan, reported on Friday that Amazon would market the ad-supported service through its Echo speakers and offer a limited catalog. Amazon declined to comment to Billboard.
According to the report, Amazon has "offered to initially pay some record labels per stream, regardless of how much advertising" it sells.
Spotify shares have endured a bumpy ride since debuting on the New York Stock Exchange last April through an untraditional direct listing. Shares closed out their first day of trading at $148.30 apiece, and finished Friday's session at $144.95 after rallying as high as $198.85 last July. They've fallen 27% since.
The Swedish streaming-music platform purchased podcast companies Gimlet and Anchor earlier this year to compete with Apple's popular iTunes podcast offerings.
Monday's sell-off was a familiar market reaction to Amazon's plans to enter into a new industry. Earlier this month, Roku shares dropped after it was reported that Amazon was exploring plans to intensify its video-streaming offerings.
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