Apple Music Growing at Record Pace With Two Million Subscribers Added in Just Five Weeks

[MacBebe]

What is the point of being the top music streaming service if you are not profitable?

 

[Boatboy24]

Is this the HomePod effect?

It was for me. I started my trial after my HP purchase. I've been using the Pandora $4.99 plan for a couple years now and have been happy with it. But the ability to download tracks, create custom playlists and have 'optimized' sound has me pretty certain that I'm about to cancel Pandora and go with Apple Music.

And to think I purchased the HomePod thinking I'd try it out and return it. Boy, did I get sucked in...

 

[wigby]

EE are 'giving away' 6 months of Apple Music Subscription with a lot of their cellular plans at the moment in the UK.
Apple Music is a good service. I used it for a while there, but changed over to Amazon Music a few months ago so I could get myself out of that walled garden. It was just as well (for me) - I can't justify spending that much on an iPhone X when there are better phones on the market for less money. Now I've switched most of my iCloud services too, and can enjoy the best of all worlds; i.e. Mac OS on my desktop, iOS on my iPads, and Android on my Google Pixel, with google's ever expanding services used across the board, and Alexa in the kitchen. For me it's just a cheaper and more flexible way to get the best services at the time, without having to be locked into and waiting for iCloud, and it works really well. It's liberating not being tied into hardware like that. I don't have t get excited about the HomePod because I can build a better home assistant and speaker setup without the cost, for example.

The point is that I get to choose. Life's too short to think that Apple are the only game in town.

I appreciate your position and preferences but I think many Apple users are the exact opposite. I like being in a walled garden because I don't have to consider non-Apple devices and configure them to work with my other devices and workflows. Life's too short.
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What is the point of being the top music streaming service if you are not profitable?

The point is that they are going public and raising hundreds of millions of dollars to subsidize their falling profits. But even after that, Spotify still has an uphill battle against Apple, Google and Amazon.

 

[Zimmy68]

What is the point of being the top music streaming service if you are not profitable?

I would say, if you are Apple, why would you worry about being profitable with a streaming service when you have the huge benefit of selling hardware to support it.
If Apple wanted to win they would charge $5-$7 a month but they are more concerned about the profit.

 

[adamjackson]

At less than $3/month, it's pretty easy to justify.

Economies of scale & varying usage habits for sure.

For every Family plant full of 6 friends, there's a person like me paying $10 a month and mostly listening to songs I already own which doesn't cost apple anything.

The money is made on users who rarely stream..it pays for the 1% who leave it on 24/7 even while sleeping.

 

[BigMcGuire]

My wife and I just switched to Apple Music. Google Music just got rid of a lot of songs my wife liked so she wanted to try it out. We're here to stay and paid the month family subscription. Google Music family plan includes Youtube Red and I have a few family members helping with the cost of that, so that's not going anywhere.

Taking a little getting used to but we like it. May just be us but we both think the songs sound a little better on Apple music.

 

[OldSchoolMacGuy]

It depends on how Apple accounts for these "free" trials. They may count them as "paying" members since they have their credit card on file; and internally they just apply an fee-equivalent "credit" to the user in order to maintain the illusion of being "free".

Trial members are NOT counted as paying members.

 

[citysnaps]

- deleted -

 

[oneMadRssn]

Economies of scale & varying usage habits for sure.

For every Family plant full of 6 friends, there's a person like me paying $10 a month and mostly listening to songs I already own which doesn't cost apple anything.

The money is made on users who rarely stream..it pays for the 1% who leave it on 24/7 even while sleeping.

I forgot the source, but I remember reading recently (reddit link most likely) that almost all users listen to a pretty narrow range of music on Spotify. Basically, most folks don't venture far from their dozen or so favorite playlists and bands. It might be that some user's cache of music is 500 songs, and another's is 5,000 songs, but either way, they don't venture outside of their bubble that much.

 

[deanthedev]

Apple Music executive and record industry mogul Jimmy Iovine recently said streaming music services are "not making any money" due to a lack of margins, suggesting that a standard $9.99 per month subscription is not profitable.

He said there were no margins, implying that they are operating somewhere near break-even. That doesn't mean they're not profitable, but more like they're not making a "lot" of money. He also stated this wasn't a problem for Apple or Amazon since they make their money elsewhere, but is a huge problem for Spotify who ONLY have one source of revenue.

I don't see Apple raising prices in the future (not with Amazon and Google also offering a streaming service). I see Spotify giving up on the free tier and becoming a subscription only service. Their current business model isn't sustainable.

 

[npmacuser5]

Lost leader, family plan. Every time a song played, a very small amount goes to the music industry. On the family plan, the average price per person can drop to around three dollars a month. Additionally, more music played per user/household guaranteed. I suspect these plans are a significant lost leader for all subscription music providers. Wonder what percentage of the 38 million users are classified as family?

 

[MrX8503]

I'm an Apple Music user mainly due to it connecting to my other devices seamlessly. I envy Spotify's music curation. I'm the type of person that doesn't know what I feel like listening to, but Spotify does and does really well.

For example Spotify has playlists for almost every activity with songs that are spot on. Apple Music has something similar but fewer playlists and less relevant songs IMO.

 

[Boatboy24]

Taking a little getting used to but we like it. May just be us but we both think the songs sound a little better on Apple music.

I was thinking the same thing - and not just on the HomePod.

 

[ColdShadow]

Spotify is better and will continue to beat Apple Music.

 

[creediddy]

Spotify does not have the product portfolio to survive as just a standalone streaming company. Just as what happened to Pandora it will happen to Spotify. Spotify does not have enough paid subscribers. Regardless of 150+ million active members, but only less than 80 million are paid subscribers over the last 10 years. Its great, but not impressive.They need to diversify. Apple Music is only just an service add on to their product base. Apple Music can be ran as a standalone company due to its growth projection.

 

[Robinovack]

A couple of days ago I was very excited to finally try Apple Music. I subscribed for a 3 months Trial and then after a few minutes I realized that almost all musics and podcasts are on German.
As I'm temporary working in German and I'm using German credit card for this account, there is no way to change the localization of the podcasts, musics suggestions and discovers.

Also, I wanted to change the store but there is another big Apple wall. I need to wait for 3 months to trial ends before I will able to change the Store and choose english as my preferable language for this content.

I just wonder why they use term 'Smart' for everything like SmartWatch, SmartPhone etc. when they are in reality really stupid.

 

[adamjackson]

I forgot the source, but I remember reading recently (reddit link most likely) that almost all users listen to a pretty narrow range of music on Spotify. Basically, most folks don't venture far from their dozen or so favorite playlists and bands. It might be that some user's cache of music is 500 songs, and another's is 5,000 songs, but either way, they don't venture outside of their bubble that much.

I'm in that group for sure. I haven't listened to a new song in 10 years unless it's a new album from an artist I listened to 10 years ago. with 25,000 songs in iTunes, I really don't need Apple Music. Was an iTunes match subscriber until my GF and I decided to share a family plan on Apple Music but I'm definitely high margin for Apple. I own most of what I stream from them. iTunes Music Store user since 2003, iTunes customer since version 1.

https://www.last.fm/user/adamjackson1984/library/artists

The only thing recently is I have started listening to some iTunes radio stations which are a lot of artists I've never heard of but it's also refreshing in the same way.

 

[hortod1]

Russian bots don’t count

 

[npmacuser5]

I'm curious: how is music streaming subscriptions not profitable at $9.99/mo but Netflix is ($7.99/$10.99/$13.99 tiers)? https://www.forbes.com/sites/danafe...-in-2017-exceeds-11b-in-revenue/#70d77d4c88eb

Netflix even has the added burden of creating expensive original content.

Does the music industry truly have that many more "middle-men" that need to get paid that film/tv doesn't?

Anecdotally, I could justify having only so many $10/mo subscriptions. They add up quick. So when it came to cutting subs, it was very easy to cut the music. The utility gained over free radio (OTA and internet) is quite minimal for me personally, vs. going from a tv/film sub to free OTA tv channels plus youtube or whatever. Perhaps my moral objection to pirating content online is contributing here. More so I think I just find commercials so much more jarring when watching tv/film vs. listening to music (immersed in a story vs. background sound). Also, I have hundreds of hours of music that I own that I will happily re-listen to again and again whereas you can only re-watch a dvd so many times.

For music subscribers (AM or Spotify [or I guess another service I'm not aware of but please include the monthly cost]), let me know your top 3 reasons that you think justifies the $10/mo cost. Maybe I'm missing something here.

Totally different customer interactions with Netflix. Many turn on music, leave it on all day. Not much need for user interaction. Netflix requires the users attention. On a given day very few turn on Netflix and let it play all day. Netflix model, pay and hope you Watch very little. Does not appear to be the case with music subscriptions.

 

[Ghost31]

Came here with the same thought. Definitely partially due to people buying HomePods and starting their free trial.

Does a free trial for Apple Music really count as a paid subscriber though? I would think it would only count after the person is actually paid

 

[kc2kth]

I'm one of those subscribers. As an old guy though I use it primarily to download albums that I haven't heard in a while that I never repurchased on CD or digitally (I originally bought everything primarily on cassette, but also some on vinyl since vinyl was $1 cheaper than the cassette) or ones that I missed, never purchased, etc. For $10 a month I figure it's about a wash compared to how many albums I'd still be buying over a year.

 

[nwcs]

I’m one of the new subscribers in trial. I have to admit it’s better than I assumed. I may end up paying.

 

[The Game 161]

This is why HomePod is made for Apple Music first

 

[UbuntuFu]

Spotify family is $15/month for 6 users. That works out to $2.50/month per user. With my family, each person on the plan Venmos me $35 every August to cover the year plus sales tax.

We can debate the morals of counting parents, siblings, aunts, uncles, cousins, and in-laws that don't actually live with you as "family." However, I note that Spotify does nothing to verify the living arrangements. You just get the family plan, add 5 additional usernames or email them links to "join" the plan, and that's it. A ton easier than family sharing on Apple.

At less than $3/month, it's pretty easy to justify.

Not sure if you've been to the account settings of your Spotify but they are now doing address checks. I signed up a long time ago and added 5 of my "family" through email invites. I only checked a couple of months ago and it asked for my address, so I just closed it. I guess if I need to update any of my family email accounts I'll text them my mailing address.

 

[RudySnow]

Spotify is better and will continue to beat Apple Music.

Quite a thoughtful, scientific analysis.

I beg to differ. Apple Music integrates with my AirPlay devices, mine and my family’s hardware, and I can control music with my Apple Watch. The playlists may not be as well-curated (or as long) as Apple’s but if I like a Spotify playlist, I just move it over to AM with STAMP. Plus, with Apple’s cash/stability, I don’t have to worry about Spotify going belly-up when their investors come calling.

I guess you mean that Spotify has a “dark mode.” I’ll give you that. Very important detail for some people, I suppose...