Amazon.com Inc will offer more than a million tracks for ad-free streaming and download to Kindle Fire tablets as well as to computers and the Amazon Music app for Apple and Android devices.
The service, called Prime Music, is likely to be integrated with an Amazon smartphone.
People who pay USD 99 a year for Prime can listen to tens of thousands of albums from artists including Beyonce, The Lumineers and Macklemore & Ryan Lewis for no extra cost.
By adding music, Amazon is hoping to hook new customers and retain existing ones on its Prime free-shipping plan, which also allows subscribers to watch streams of movies and TV shows and gives Kindle owners a library of books they can borrow once a month.
Steve Boom, Amazon's vice president of digital music, said the service will pay for itself and isn't part of the reason why the company raised the price of Prime from USD 79 in March -- a move Amazon said would cover higher shipping costs.
Instead, the company will benefit because Prime members tend to buy more from Amazon and remain loyal customers. "If they come to Amazon for their music needs, they become better and longer-term Amazon customers, and we think that's a good thing," Boom said.
The deal comes on the heels of Apple Inc's announcement that it is purchasing headphone and music-streaming company Beats for USD 3 billion and is a further acknowledgement of the rise in popularity of streaming and the decline of digital downloads.