The move comes as the streaming wars intensify with the imminent launch of Apple Music and the continued growth of Spotify.
The ad-supported version of Google Play Music is launching first in the USA. It will be available on the Web on Tuesday and on Android and iOS devices later this week.
"We want to attract even more users, give them a taste of the service and hope they subscribe over time," said Zahavah Levine, vice president of partnerships for Google Play.
Radio stations on the service are curated by music experts — including staffers from Songza — so users can browse stations by genre, mood, decade or activity or by artist, song or album.
A paid subscription gives consumers access to other features such as skipping ads, listening to music offline, creating playlists and perusing the library of 30 million songs. Subscribers also get early access to YouTube's subscription service.
Levine declined to say how many subscribers Google Play Music has. MIDiA Research analyst Mark Mulligan said Google is a "minor player" in the streaming market.
Google wants to be on every screen and on every device so online advertisers can target consumers wherever they are and no matter what they are doing. With more consumers streaming music on smartphones and tablets, Google is looking to keep people hooked on Google services and Android mobile devices.
"Free is what Google does best — they know how to build user engagement around free and monetize it with advertising better than anyone else," Mulligan said.
The major music labels have complained that easy access to free music has kept people from paying for music streaming. So far, music aficionados, not mainstream consumers, are the ones paying for subscriptions, said Jan Dawson, chief analyst for Jackdaw Research.
The vast majority of Spotify users are not paid subscribers. Spotify offers a free ad-supported service as well as paid subscriptions.
"Spotify numbers show it's a small subset of users who feel this is something worth paying for," Dawson said.
Google's video service YouTube is the world's most popular streaming destination. Google is testing a subscription YouTube service that lets viewers skip ads while watching millions of videos for a monthly fee. But the Internet giant's main focus remains advertising "because it helps them drive user engagement which generates more data and thus more ad dollars," Mulligan said.
"I think Google will do a much better job of enticing passive music fans to the free offering than it will converting them to paid," he said.
The music industry is hoping that Apple's new service, Apple Music, set to launch on June 30, will entice hundreds of millions of iTunes customers to embrace the subscription model on the same devices on which they already download and listen to music.
Apple, Google, Spotify and other players are in a race to capture the streaming market as the music industry makes the transition to consumption from ownership. Downloads generated $2.6 billion in revenue in 2014, down 8.5% from the year before while streaming generated $1.87 billion last year and overtook CD sales for the first time, according to the Recording Industry Association of America.
Spotify has a big lead, having doubled its paying subscribers to 20 million over the past year. But the vast majority of its users — some 60 million — do not pay for the service.
Apple Music will offer a $10-a-month streaming subscription plan that includes a free Internet radio station and a media platform that will let artists upload songs, videos and other content. The service which has a song catalog of more than 30 million tracks offers a free introductory period but no permanent free tier. Apple's Internet radio offers stations curated by live DJs introducing consumers to new artists.
"We are very excited about the growth of streaming generally and we think there's room for all boats to rise here," Google's Levine said. "Streaming is growing so rapidly that we are all beneficiaries of this great new way of consuming music."
Dawson says it's unclear if Google's strategy of offering a free ad-supported version of the service will eventually net paying subscribers.
"It's not a gateway drug to a subscription service," Dawson said.
Source: http://www.usatoday.com/story/tech/2015/06/23/google-launching-free-ad-supported-version-of-google-play-music/29156687/