Amazon is planning a standalone music streaming subscription service to rival Apple Music and Spotify. The company is in the process of finalising licences with labels for the service. The service is expected to hit the market either in late summer or early fall.

Sources familiar with the matter told Reuters the service would be offered at $9.99 and with a competitive catalog of songs. Apple Music and Spotify offer more than 30 million songs. Amazon offers free music streaming service with a limited catalogue to Prime shipping and video service subscribers.

Amazon believes a comprehensive music service is important for a one-stop shop for content and goods. Another thing is the new music service is aimed at increasing the appeal of Amazon Echo.

Jay Samit, a former music executive, told Reuters, "A music service will further increase the daily interactions between Amazon and its customer base."

Amazon's service is also expected to diversify subscription services. In April, the company introduced a new monthly subscription for Prime membership services. The company's new offering for movies and TV shows comes with a subscription amount of $8.99 per month.

Other tech majors such as Apple and Google have also entered into the music streaming service in recent years.

Amazon believes its music service's integration with Echo would strengthen the home speaker's appeal, said the sources. The company's latest move suggests it would offer basic media options through Prime subscriptions for consumers.

The new music service is unlikely to be a challenge for Spotify, but it could be a threat to other players, said David Pakman, a partner at Venrock who earlier headed Apple music efforts.