YouTube to launch its own music streaming service, says report.

The online video site will compete with the likes of Pandora and Spotify by kicking off its own online music service later this year, says Fortune.

YouTube may be adding music streaming to its lineup.

YouTube may tune in to the online music world this year with its own streaming service.

The service would likely offer free music streaming paid for by ads as well as an ad-free subscription option, according to Fortune, which says it was briefed by sources in the record industry and by an unnamed person at Google.

A YouTube representative told  that "while we don't comment on rumor or speculation, there are some content creators that think they would benefit from a subscription revenue stream in addition to ads, so we're looking at that."

YouTube's streaming service would share at least one new feature reportedly coming to Google Play. Users of Google Play can currently buy, store, and listen to their own tracks online. But both services will reportedly offer a subscription plan designed to add more benefits.

Record industry executives are still on the fence over the merits of a free ad-supported model versus an ad-free subscription, the sources told Fortune. More customers gravitate toward the free approach but many have been quite willing to pay for subscriptions that block out ads and offer more features.

Of course, YouTube would compete against a host of other streaming-music sites, including Pandora, Spotify, Rdio, Muve Music, and Soundcloud. All of those services have a big head start and a fair number of users.

Spotify leads the pack with 5 million paid subscribers around the world and 1 million in the U.S. Muve Music holds 1.4 million customers, followed by Spotify with around 1 million.

But YouTube's audience is a lot bigger. More than 800 million different people visit the site each month, a lucrative landscape for music companies.