Update: Amazon has come out and denied the rumors that it will launch an ad-supported video streaming service for music videos and TV shows.

Spokeswoman Sally Fouts said it has no plans to do that:

"We're often experimenting with new things, but we have no plans to offer a free streaming-media service."

So there that is.

Original story continues:

The latest on Amazon's streaming ambitions - aside from its presumed streaming device - is that the e-tailer turning everything-tailer will launch a free media streaming service in the coming months.

Citing sources, the Wall Street Journal reported Amazon is plotting a streaming TV and music video service.

As of now it charges $99/year for Prime video access, but the new offering would open the door to shows and music vids for free thanks to the support of advertisements.

Content may include original series, like Betas, and licensed programming. Amazon may even stream ad-supported music videos to shoppers on Amazon.com - search for a CD from a particular artist, have the option to watch a music video by said artist.

Of course, Prime video would undoubtedly be far more premium than what the free streaming service could offer.

Amazon's arms

Though nothing is confirmed, Amazon seems set on becoming much more than a purveyor of internet goods.

Invites to an April 2 event went out earlier today, and word on the street is the company's Apple TV/Chromecast/Roku streaming media device will show its face then.

A free streaming media service seems a logical extension, not only giving consumers more ways to consume Amazon but also earning it valuable advertising dollars with every viewer.

The company wouldn't even need a device to stream programming and videos, as sources said the streaming service could live in a dedicated section on its website.

Although Amazon's service may be indefinitely delayed (as some sources say), we say, watch out, YouTube and Hulu. A well-backed streaming competitor may just be coming your way.