Amazon Prime Instant Video Coming In Free, Ad-Subsidized Version (AMZN)

Amazon Inc. (NASDAQ:AMZN) has plans for a free streaming service supported by advertising, according to Wall Street Journal report. The company also has plans for a free, ad-subsidized music video service.

Amazon currently offers members of its Prime subscription service access to Instant Video, a library of shows and films that can be streamed. Amazon gives Prime members free two-day shipping for select items on its online marketplace, and recently raised the service’s price from $79 to $99 on March 20.

The new plan, which would begin in the next few months, would place Amazon in direct competition with free, ad-supported streaming services like Hulu. The report says Amazon will consider both licensed and original programming, such as “Betas,” a comedy series about Silicon Valley it produced in 2013 for Prime Instant Video. Amazon has held discussions with “Betas” creators about the free service, which it may change or delay due to financial constraints, according to the report.

Amazon is also considering adding ad-supported music videos to its website. Customers who search for a band’s album may be given the option to view their latest music video, for instance.

The move signals a shift toward multimedia and advertising, as Amazon creates an advertising service for its own website and others to rival Google Inc.’s (NASDAQ:GOOG) Adsense service. Amazon may use the free service to entice customers to pay for Amazon Prime, as members often spend twice as much on the site than non-members. The free streaming service would also give Amazon insight into customer preferences and tastes, to better cater their advertising and promotional efforts.

Amazon is expected to unveil a multimedia streaming device on Wednesday in New York, to compete with the Google Chromecast, Roku and Apple TV. The device would stream videofrom Amazon Prime Instant Video, along with content from providers like Netflix (NASDAQ:NFLX) and Pandora Internet Radio (NYSE:P).

Follow Reporter Thomas Halleck @tommylikey on Twitter