By Ethan Smith And Daisuke Wakabayashi 

Until now, there have been two players in subscription music: Spotify and everybody else.

That is expected to change on Tuesday, with the launch of Apple Music, offering unlimited, on-demand access to tens of millions of songs for $10 a month. It's the same fundamental proposition as Spotify AB, Google Inc. and many smaller competitors, all of which offer more or less the same music library for the same price.

Apple Inc. will rely on its brand, its installed base of users and its marketing prowess to differentiate itself and attract the millions of users it needs to create a successful competitor in a market that so far has had a small, if enthusiastic, user base.

Apple said its new streaming music service will be available from Tuesday morning in the U.S. as part of an update for its iOS software. The company is betting that it can convert a meaningful percentage of its 800 million iTunes accounts--most with credit cards attached--to the service.

The subscription service is one piece of Apple's new music offering, which also includes a 24-hour-a-day Internet-radio station called Beats 1 that will feature well-known radio DJs and celebrities. Another component is called Connect, which aims to provide artists with a way to distribute certain music free of charge, similar to SoundCloud.

The subscription service is the heart of its new initiative, at a time when the music-download business that Apple helped establish is slowing down.

It faces a formidable competitor in Spotify, which had 4.7 million paying subscribers in the U.S. as of last December, according to data shared with music publishers. Spotify also has 14.7 million U.S. users for its free ad-supported service. Apple plans to limit its free offering to a three-month trial period, so the battle will be for subscribers.

Google Play Music was a distant No. 2 in the U.S. among paid streaming services, with about 815,000 subscribers. Globally, Paris-based Deezer is the second-largest streaming service, after Spotify, but Deezer lacks a meaningful presence in the U.S., where music services are required to share detailed usage data with music publishers.

Rhapsody, the decade-old granddaddy of subscription services, had 705,000 subscribers in the U.S. for the version of its service comparable to Spotify Premium or Apple Music.

Beats Music, which Apple acquired last spring, ended the year with 303,000 subscribers. Early descriptions of Apple Music indicate it borrows heavily from some aspects of Beats, particularly for customized music suggestions. Apple is expected to migrate Beats users to Apple Music in the near future and discontinue the older service, according to people familiar with the matter.

Only about 25% of the 110 million iTunes Music customers who bought music last year spent more than $110 on songs and albums, according to people in the music industry. To attract enough users, Apple may have to position its new subscription service as more than just a replacement for downloads.

For instance, custom playlists of new music based on a user's existing iTunes catalog, or on an activity or mood, could be selling points. People in the music industry expect Apple to pitch the subscription service as a cost-effective alternative to downloading, by pointing out that a month of unlimited access costs roughly as much as buying a single album.

Apple may be angling for a social component to its new service. Terms of its licensing agreements with music companies call for allowing Apple Music subscribers to share links to songs with nonsubscribers, who will then be prompted to start the free trial of the service, according to people who have reviewed the terms.

One small point likely to help Apple Music stand out: After resolving a brief dust-up last week with Taylor Swift, it will become the first subscription service to carry the pop star's "1989," as well as "The Chronic," the seminal 1992 album by Dr. Dre, who is now a senior Apple Music executive.

Write to Ethan Smith at ethan.smith@wsj.com and Daisuke Wakabayashi at Daisuke.Wakabayashi@wsj.com

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