I doubt it's purely a response. They mentioned that they're going to be inserting advertising into the streams now for free users, which isn't something you build out in a day. I'm sure they've been planning this for a while. Maybe the Spotify announcement forced them to announce and release it sooner than they were planning, though.

They cut a deal with Cumulus back in September to help make this possible. It's probably just coincidence, though they may have rushed it out the door after Spotify did the same. http://www.nytimes.com/2013/09/16/business/media/a-digital-d...

Both are response to coming launch of Beats Music.

Seems like it. If so, that was quick turnaround!