New York (Reuters) – Amazon.com Inc (AMZN.
O) plans to pay down $8 billion in debt as it opens up new payment plans, including a new plan to buy music.
The e-commerce giant on Thursday announced plans to invest $1 billion in music payments, adding that the money will be used to finance a new payment product that will let customers pay for digital content they purchased through Amazon Prime.
The new service, known as Amazon Prime Music, would offer a one-time payment to people who own a music subscription on the company’s Prime Music service.
The company’s stock has rallied more than 100 percent in 2017 and is trading above $350 a share, a level that makes it the largest U.S. company to raise money for its music businesses.
The announcement came a day after Prime Music launched on Apple’s iTunes platform and Amazon announced it was launching its own service on Amazon Prime, an online music store.
The music service is an upgrade of Prime Music that Amazon launched in 2016.
The deal with Amazon will allow Amazon to use the money to purchase more music content, which it could then sell through a third-party music service, according to a person familiar with the plans.
The person asked not to be identified because the plans were not made public.
It also brings Amazon’s music business closer to its core business, the person said.
Amazon’s plans include a new music streaming service, Amazon Music Unlimited, that would compete with Spotify Inc (S.O.O.), Apple Music and Google Music.
It also will invest $500 million in building its own cloud-based music service.
Shares of Amazon rose 0.7 percent to $89.59 in extended trading.
Shares fell as much as 5.4 percent in early trading.
Amazon did not disclose how much it plans to spend on the new service.
The company is also planning to add more than 10 million paid members and expects to double its subscription base in the next three years.