Analyst Predicts Apple Music Will Average 40 Percent Growth Per Year Through 2021

Discussion in 'iOS Blog Discussion' started by MacRumors, Apr 18, 2018.

  1. MacRumors macrumors bot

    MacRumors

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    Apple Music has seen a consistent rise in subscriber numbers over the past year, with the streaming music service's fastest growth yet -- hitting 40 million subscribers -- coming just this month. According to Macquarie Capital analyst Ben Schachter, Apple Music will keep up its progress and average 40 percent growth each year over the next three years (via The Wall Street Journal).

    With this projection, Apple Music would see subscriber numbers reach about 56 million within the next year, 78 million in two years, and break the 100 million paid subscriber milestone in under three years. For comparison with previous growth, Apple Music sat at 10 million subscribers in January 2016, 20 million in December 2016, 30 million in September 2017, and 40 million in April 2018.

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    Schachter explains that while Apple Music will continue to be a solid performer for Apple, music streaming royalties will prevent it from becoming Apple's most profitable service.
    Still, the analyst's projections mark Apple Music as the "fastest-growing" service in Apple's services segment, which includes platforms like iTunes, the App Store, iCloud, Apple Pay, and AppleCare. In the company's upcoming quarterly earnings report on May 1, total services revenue is predicted to hit $8.3 billion for the second fiscal quarter, up 18 percent year-on-year. In the first fiscal quarter of 2018 Apple's services saw revenue of $8.5 billion, up 18 percent from 2017 and setting an all-time quarterly revenue record.

    Morgan Stanley analyst Katy Huberty said earlier this year that Apple's services category will be the company's main revenue driver over the next five years. While iPhones will make up 22 percent of revenue growth through 2023, Huberty predicted that services will contribute more than 50 percent of Apple's total revenue growth over the same time period.

    For Apple Music, the service's growth is believed to soon eclipse Spotify within the United States in terms of paid subscribers. A report from February said Apple Music was growing at a pace of about 5 percent monthly (which would total a faster annual growth than Schachter's prediction), compared to Spotify's 2 percent clip. According to these growth rates, Apple Music is expected to surpass Spotify in paid U.S. subscribers as soon as this summer. Spotify last updated its paid subscriber count in December 2017, marking 71 million users.

    Article Link: Analyst Predicts Apple Music Will Average 40 Percent Growth Per Year Through 2021
     
  2. sp3k0psv3t, Apr 18, 2018
    Last edited: Apr 18, 2018

    sp3k0psv3t macrumors regular

    sp3k0psv3t

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    Wow that’s a pretty large growth rate. Yes they hit 40m users now but that is unsustainable; once you have customers you have them. They are not enough available customers I believe that are interested in AM to maintain current growth. Yes there are tons of people in the world as “potential customers,” but the thing is, if you want AM you probably already have AM and for those that don’t, I’m sure they are happy with the alternative they are currently using as well.

    Impressive as hell if capable, but it is from an analyst lol.

    Have AM and like it, but not the “bees knees” lol; nice integration and works ok. Like it because ite Apples version and nice integrates into my IS; it’s not the best or cheapest but it is the most convenient.



    Best,

    USVet
     
  3. NoNothing macrumors 6502

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    I don’t really see an explanation why he predicts the growth will suddenly slow. Looks to be overly conservative on growth predictions.
     
  4. H3LL5P4WN macrumors 68020

    H3LL5P4WN

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    I'm pretty sure that indicates that Apple pays artists better.
     
  5. sp3k0psv3t macrumors regular

    sp3k0psv3t

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    #5
    Maybe you are right. I don’t do finance. My personal opinion is based on nothing lol. That being said, it just seems like it took a long time for Appel to get the base it has now and it was a fight the whole time at that. Maintaining that growth, or more, is going to be difficult. Especially with the advent of competitors, price cuts, packages service combining video and music, etc. that are going to drive consumers into varying directions for personal choice use.

    I use AM because its the most convenient and integrated with iOS; not because it’s the best or cheapest. But any problems to Apple or iOS causing people to leave the ecosystem will need an alternative music app.

    Best

    USVet
     
  6. jedwards87 Suspended

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    #6
    Never been a fan of Apple Music. Their recommendations are off for me. I have gone in a reset things. And I rarely find new music to listen to compared to what I do on both Google Music and Spotify. I'm currently using Google Music and find it a real pleasure to work with.
     
  7. zorinlynx macrumors 603

    zorinlynx

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    I just wish they could fix the lousy interface it has.

    Apple is normally so good at UI; why have they botched Apple Music so much? Spotify and Google Play have their flaws too but they're not as irritating to navigate and they don't mess with your existing music library.
     
  8. H.E. Pennypacker macrumors 6502

    H.E. Pennypacker

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  9. Shirasaki macrumors G3

    Shirasaki

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    Apple ignores Japanese music a lot. Not saying it’s bad cause it is not born in Japan but one deal breaker for me.
    Now it has its own new problem: disastrous support for Bluetooth headphones that support multipoint.
    Interface triggers my slight motion sickness every time I pull up the now playing. It just looks weird.
    I now lose hope for it to ever improve. I only hope it still supports iTunes.
     
  10. KidAKidB macrumors 6502

    KidAKidB

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    #10
    Not necessarily... Could just be that Apple is dumping more money into it as they're newer.
     
  11. ArtOfWarfare macrumors G3

    ArtOfWarfare

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    Just move onto Spotify like the rest of the world.
     
  12. tkukoc macrumors 65816

    tkukoc

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    Still won't see me purchase a streaming music service. I want control of the music I have and want it backed up. Too many rare things not even available on these services either. Only music streaming service I use is iTunes Match, essentially it's my music.. my way. 25.00 a year.
     
  13. RoobyRoobyRoo macrumors member

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    I'm an Apple Music subscriber (I like to get those deals where a place sells a $100 iTunes gift card for $80 and use those to fund it), but I really hope they make some big improvements to it. It's lacking in a lot of areas, including UI, playlists, recommendations, etc. There are some things I like about it, including that they pay artists more than most other services, but I'll take any opportunity I can to ask them to make things better, because frankly right now I don't think they'd deserve to be the #1 music streaming service.
     
  14. WWPD macrumors regular

    WWPD

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  15. H3LL5P4WN macrumors 68020

    H3LL5P4WN

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    #15
    I thought of that from the angle of Spotify having to stand up their own network vs Apple already having it in place.
     
  16. ArtOfWarfare macrumors G3

    ArtOfWarfare

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  17. tubular macrumors 6502

    tubular

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  18. bladerunner2000 macrumors 68020

    bladerunner2000

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  19. genovelle macrumors 6502a

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    #20
    They really only need 10 of their iPhone users to meet this prediction. I think it’s very conservative.
     
  20. Shirasaki macrumors G3

    Shirasaki

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    #21
    Unless Spotify is geolocked.
    Streaming service is the trend but CD selling will last for a long time.
     
  21. threesixty360 macrumors 6502

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    #22
    Growth rate will slow because the inital growth rate is built on existing customers.
    Say the end ratio between phone owners and AM subscribers is 1 in 10.
    And it takes a year to sell 100m phones.

    The initial instal base is 1b, so filling up that ration can happen fairly quickly,
    maybe a few years to sell AM to the inital 1b. So that makes the growth rate fast to get the first 100m
    as your not waiting for them to buy a phone, they all already have them.

    But when you reach that 100m AM, the growth has to come from the next 100m phones sold which will take a year to do.
    So for that year you will only add 10m and not 100m that you managed to get done in the first year or so because of the install base.

    So there is always a natural saturation point with these things where growth will slow down pretty sharply I would imagine.
    As the whole thing is really tied to apple device sales.

    The battle will be to see if they can increase the long term ratio of AM subs to device owners by increasing its desirablity.
    I think they will do this by Cable style bundling with things like the magazine service, or offline storage etc..

    They will try to use Apple Music is an entry to other services they sell as AM is the most high profile product and that can drive other sales.
    They will do what Amazon Prime is doing. Prime has 100m users but thats because they do more than subscribe to films. Thats the way forward.
     
  22. ArtOfWarfare macrumors G3

    ArtOfWarfare

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    Spotify Premium lets you download playlists. I have it download the "My Songs" playlist, so I just swipe right on any song, it goes into My Songs, and downloads. Then I can listen to it whenever. I figure if you put your phone in airplane mode, it can't geolock you because it doesn't know where you are (although I doubt the geolock is actually enforced for anything other than sign up... and is probably done entirely via IP address, no GPS.)
     
  23. Shirasaki macrumors G3

    Shirasaki

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    #24
    I prefer physically own music instead of renting, cause doing that I can easily curate song artist, genre, lyrics, or even edit the song itself to suit my need (I do cut part of one song cause I don’t like the leading and trailing part ). I still think streaming service is good for discovering.
    Regarding the geolock, I don’t know if Spotify will block VPN, unless that VPN uses advanced protocol, in Which case software will not be able to know the true IP address.
     

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23 April 18, 2018