Spotify, spooked by Beats Music, hopes that free streaming will help it keep its edge

To combat the launch of Beats Music, Spotify is turning to what is probably its greatest feature: Users don’t have to pay for it.

On Wednesday the company announced that it’s giving non-U.S. Spotify users unlimited free streaming on the web and its desktop app — with no time limits. The feature, previously available only to users in their first six months of using the service, comes a month after Spotify brought free music streaming to its mobile app.

Spotify’s efforts to expand free streaming services to more users are in direct contrast to Beats Music, which will run for $10 a month and have no free component.

Spotify, then, is drawing the line in the sand and giving a good hint of how it plans to market itself against its well-funded competition: “Spotify = Free (at least until the ads annoy you enough to pay for it).”

Above: The rise of Beats Music could make it a bit harder for Spotify to sell these.

But being free may only be so effective against Beats Music, which is not only backed by the brand power of Beats headphones, but will also be marketed in every conceivable way. Beats has inked a deal with AT&T to offer Beats Music alongside AT&T’s smartphone service plans, and it’s also paid for plugs on the Ellen DeGeneres Show and promotions in Target stories. There’s even going to be Beats Music Super Bowl ad.

In other words, Beats is trying to make its music service a mainstream product almost overnight. And that could be bad news for Spotify, which had 24 million monthly active users and 6 million paying subscribers at last count.

The big question, though, is whether streaming music services are a zero sum game. One bad scenario for Spotify is that a significant percentage of its paid users could try out Beats Music and enjoy it so much that they’ll never give Spotify another thought. Does anyone really need access to two music subscription services that have roughly the same selection?

Spotify might not like the answer to that question.