Apple Targeting 100 Million Subscribers for Streaming Music Service

[Zedcars]

100 Million times $10/month = $1 Billion per month. 3 months at $1 Billion/month = $3 Billion.

If this is going to be embedded in iOS 9, it seems very likely Apple will become King of the streaming space within hours after launch. This is just the Microsoft IE browser (vs. established Netscape) thing again.

And, since there is a 90-day free trial, Apple should be able to tout gigantic numbers of users pretty quickly. The key question will be monetizing free trials to stick around and start paying. The referenced rumor of 800 million iTunes accounts means about 1/8th of all iTunes users will need to not only partake in the free trial but convert to paying subscribers AND/OR that this will significantly draw more people into the iTunes total number of accounts pool..

As you have aluded to in your second paragraph, the measure of success would be in counting paid subscribers, especially after 1 year in and once more countries are on board, not in the hours and days after launch.

One other interesting bit of (obvious) math: $1 Billion/month times 12 months = $12 Billion new dollars for AAPL's revenue line.

You realise Apple doesn't get to keep the whole of that $10 pm itself right?

 

[Godzilla71]

Since when do skateboarders listen to hiphop?

Well they did put hip hop songs in the Tony Hawk games along with rock and punk so who knows.

 

[8CoreWhore]

So long as there are data caps, count me out.

 

[Abazigal]

As you have aluded to in your second paragraph, the measure of success would be in counting paid subscribers, especially after 1 year in and once more countries are on board, not in the hours and days after launch.

You realise Apple doesn't get to keep the whole of that $10 pm itself right?

True. The bulk of that revenue would flow back to the record companies. Including advertising and all, I won't be surprised if this streaming service makes a loss or barely breaks even initially. It's not like your 100 million subscribers are all going to hop on all at once.

 

[unplugme71]

This is easy for Apple. Offer 90 days free to existing iTunes customers. Buy a new phone or tablet get 1 year free.

Apple takes 50% market share in less than a year.

 

[6836838]

For me to be even slightly tempted, they'll need to be able to import all my Spotify playlists, albums and favourites...

 

[bking10]

There was a reason Apple tried to noncompetitively buy off the studios. They clearly didn't think the majority of people would pay for streaming with all the free options available. So these numbers seem optimistic to me unless they landed a big exclusive

 

[keysofanxiety]

Who else has the same sinking feeling as I do that once the WWDC keynote is over everyone is going to sit there blinking like, "seriously? that's it?"

Yeah, you're definitely not alone there.

Plus this whole recent obsession with music seems completely contradictory. I mean, they're practically killing off the iPod line and refusing to update them with any new hardware. I suppose if it's based around streaming then the need for iPods with large internal storage aren't required. Still though, it just seems ... odd.

I've been pretty underwhelmed with most of their recent keynotes to be honest, especially the videos at the start which go on about their search for passion and other such rhetoric. Sometimes Apple feels closer to a cult than a company ...

 

[monaarts]

Rumors seem pretty strong that it will be one of those. Which one will make Apple the most money?

Apple is a hardware, software, and services company, so technically the second option might make them more money in the long run... If they can get more people in to their eco system they are more likely to get revenue from Apple Pay, iTunes, App Store, Advertising, additional hardware sales, etc.

 

[attila]

Much like the Maps app, it will be Apple's cut at streaming radio, so it will be the best and all of the rest will become "abominations" that "99% don't want". While they were fine- even loved- before Apple decided it wanted to step into the space, now we have to hate them, while rallying around the only one that "got it right". You've been here long enough... you know how things work.

If you're comparing to Apple Maps, then I'm expecting most non-US residents to not use the service but the most popular competitor which has more content and features (Spotify)

 

[attila]

Apple Maps?

Not to mention .Mac!

 

[EvilEvil]

It's going to bomb like Tidal.

 

[Dave245]

I wonder if Apple is planning on doing something different with their music streaming service, they have stiff competition with Spotify and other music streaming, Apple know this, so it makes me wonder what are they going to do differently? only a couple more hours until we find out at WWDC

 

[milo]

Considering how poorly iTunes Match works, it's hard for me to imagine why I'd want to consider an even more expensive networked service from Apple.

 

[tazinlwfl]

100 mio but US only? how is that gonna work



no one knows Spotify??? in what universe

Just took a small poll around my office. Out of 25 people, only 14 knew what Spotify was. Out of those 14 people, 10 understood the different between Spotify and Pandora.

 

[HobeSoundDarryl]

As you have aluded to in your second paragraph, the measure of success would be in counting paid subscribers, especially after 1 year in and once more countries are on board, not in the hours and days after launch.

We're (at least I'm) talking PR spin not hard profits. I was making reference to what 100 million sign-ups means, pointing out that 100 million sign-ups to the free trial can still be "100 million sign ups" for PR purposes. For PR and marketing spin, free trials is as good as those that convert to paying subscribers. That's the "hours & days" bit- I expect within hours of it being embedded in iOS 9, Apple will be able to claim (spin) streaming music market dominance.

If we want to force "paid" into the claim, then I'm as skeptical as anyone... especially if we want to try to believe that "100 million sign-ups" is defined as PAID signups.

 

[monty77]

I'll give it a shot but for me to take it seriously it needs to get Sonos support or I won't be going there. Also would be nice if they waived iTunes match sub if you get this to make your music experience complete.

 

[Jax44]

What will define "sign up 100 million"? If 100 million take the free trial, won't Apple be able to spin that as signing up 100 million? At the price of free, it shouldn't be hard to get even those most UNinterested in this offering to give it a try. They'll count in the sign-up tally even if they sign up just to try it once and never use it again.

In my own case, I tried using iTunes Radio a couple of times when it rolled out. I've barely ever used it since and it is still free streaming music. Nevertheless, I probably count as an iTunes Radio user.

Apple should be able to spin compete market dominance within hours when comparing numbers of users vs. Spotify, etc... especially if it is embedded in iOS 9 as rumored. Again much like Maps immediately overtaking Google Maps in iOS when it rolled out (embedded as default), this should be no different. PR will spin that success. Media coverage will fuel those fires. The 800 million number will probably grow because people want to also try to new music "revolution" for free.

But again, the key will be can Apple convert freebies into paying subscribers? When 90-day trials are winding down, will 100 million want to start being billed for the service? Lots of media services (Sirius/XM, HBO, Showtime, etc) regularly offer free trial periods in hopes that subscribers will choose to keep the service. Some will. Many don't. We'll see what happens here.

Apple will, over time get 100 million subscribers. This will obviously take a year or two, but if their goal is 100 million, that means end game, not instantly.

 

[teslo]

Yeah, you're definitely not alone there.

Plus this whole recent obsession with music seems completely contradictory. I mean, they're practically killing off the iPod line and refusing to update them with any new hardware. ..

..underwhelmed with most of their recent keynotes to be honest, especially the videos at the start which go on about their search for passion and other such rhetoric. Sometimes Apple feels closer to a cult than a company ...

rumors of a refresh this year, no?

plus apple only seems like a cult because you're hyper aware of them. it's in the eye of the beholder, and in some ways, the concept depends on whether there's a beholder of that concept in the first place.

 

[HobeSoundDarryl]

Apple will, over time get 100 million subscribers. This will obviously take a year or two, but if their goal is 100 million, that means end game, not instantly.

Why will it take "a year or two". They are giving it away for free for 3 months. Rumors are that it will be the default in iOS 9. Someone who tries it even once will get counted in "100 million sign ups". Did it take a year or two for a relative number of people vs. total iPhone users to try Apple Maps once?

Now, if you mean they'll get 100 million PAYING subscribers in a year or two, I'll be much more skeptical. Spotify and others have been at this a long time and until Apple decided it wanted to get into their business, those have been generally viewed as good-to-great cuts at streaming music providers. They've also got free* models available. Do all of them together add up to 100 Million subscribers (free or otherwise)? How many PAYING subscribers do all of them together tally? If we assume Apple can do 2 or even 5 times better than all of them together, will that get them to 100 million PAYING subscribers?

 

[arobert3434]

Please stop posting those same "I'm at the skatepark" screenshots with every single one of these articles.

 

[Slo0tPatrol]

It's going to bomb like Tidal.

Tidal bombed because they charged $20/month for their service, while offering nothing new.

 

[Jakexb]

This is my experience too. Not many know of Spotify but they do know Pandora.

Really curious where you live (and the other people who say Spotify isn't known). Around here in NYC "listening to something on Spotify" it such a normal phrase, it's the new "listening to something on the radio".

 

[Jax44]

Why will it take "a year or two". They are giving it away for free for 3 months. Rumors are that it will be the default in iOS 9. Someone who tries it even once will get counted in "100 million sign ups". Did it take a year or two for a relative number of people vs. total iPhone users to try Apple Maps once?

Now, if you mean they'll get 100 million PAYING subscribers in a year or two, I'll be much more skeptical. Spotify and others have been at this a long time and until Apple decided it wanted to get into their business, those have been generally viewed as good-to-great cuts at streaming music providers. They've also got free* models available. Do all of them together add up to 100 Million subscribers (free or otherwise)? How many PAYING subscribers do all of them together tally? If we assume Apple can do 2 or even 5 times better than all of them together, will that get them to 100 million PAYING subscribers?

I think 100 million paid after two years is possible, but who knows...

We could ask Dvorak, Enderle or Lyons, they probably know.

 

[B.A.T]

Last year I bought $100 worth of Beats music cards for $75 and signed up for a year of service. Beats rarely works on my mac's browser but it works just fine on my phone and iPad. I'm glad there will be a 3 month trial for Apple music because if it is as inconsistent as Beats I'll be spending $.99 for a 3 month Spotify trial.

Another deal killer for Beats is that it isn't included in T-Mobile's music freedom program. I'm sure Apple Music will be but if it isn't then that Spotify wins for me.