Spotify to launch free mobile streaming service: Report

That's according to a person familiar with the matter who was not authorized to speak about the feature. It will be announced at an event in New York on Wednesday. The person spoke on condition of anonymity.

The Wall Street Journal reported earlier on the free feature, saying it will mostly serve up music based on the user's input.

The person went further, saying users can pick tracks and put them in a playlist. If the playlist is long enough, Spotify will shuffle the songs and play them back a limited number of times, interspersed with ads. If there are not enough songs in the selection, Spotify will fill in the gaps with other songs, the person said.

A Spotify spokesman declined to comment Thursday.

Currently, Spotify offers free mobile listening of randomized songs along genres in the U.S. but doesn't allow users to pick specific tracks without paying. Free ad-supported listening with track selection is available on computers. As more listening occurs on the go, the company sought a way to adapt its "freemium" model, where it hooks people with the free version and entices them to upgrade to a paid premium plan, the person said.

A premium subscription, which costs $10 a month in the U.S., allows customers to listen to any songs or albums they choose, without ads. The premium plan also allows users to save music to their mobile devices. The free version of Spotify won't allow that, meaning subway commuters might face some interruptions while streaming.

The new feature is set to be unveiled after the company this week released a slew of data and new tools that enable artists to track playback of their songs on the service.

Spotify said that as of March it had over 24 million users globally, of which 6 million paid $10, 10 pounds or 10 euros per month for premium service. It also said it had paid out more than $1 billion in royalties for songs.