Amazon's ad-supported music service will be a direct threat to global streaming leader Spotify, which offers free content on mobile and tablets.
Amazon's free-music service could start this week via its Echo speakers, according to Billboard, which cited a source familiar with the plan.
Shares of Spotify were trading at $138.62, down 4.4%. Amazon's shares were off 1% at $1,824.45.
Spotify stock has 14 buys, eight holds, two sells and two overweight ratings, according to FactSet. The Swedish audio-streaming platform has a consensus price target of $166.02 and an average overweight rating.