Spotify Announces 75M Active Users, Raises $526M Following Apple Music Debut

[Nozuka]

Music giants are getting paid by the ad model that is a part of "free". The free tier is not a charity.

And faulting Spotify for offering a free* competitor to this new Apple service is coming down on a popular option that doesn't cost fellow consumers a nickel for something pretty comparable. I know we have to support Apple in all things no matter what but wishing away free* so that Apple can be even more profitable seems to be putting Apple above Apple's customers or even ourselves.

When the clash is Apple profitability vs. consumer value or consumer options, it seems like we should "think different" rather than just automatically spinning the latter as bad. I know that is hard-to-impossible for some here but I perceive we are more Apple consumers than Apple profiteers. Maybe this site is full of shareholder first mentalities... even at customer expense???

The question is, how much are they getting paid. I doubt that it's the same amount. And the "Free Model" already had some artists pull their songs of Spotify.

And just to clarify: i'm not against it being free. this was never about me. i'm just wondering if they can keep it up.

 

[AppleInTheMud]

In Denmark several mobile-operators give you free Spotify Premium with your phone subscription. And if you have cable television or a internet connection through others they have their own app with 20-30 millions of songs. Don't think Apple Music will be a hit here. Why pay for something you get for free?

My point being. Isn't this so in many nations?

 

[HobeSoundDarryl]

It'll actually be included with iOS 8.4 prior to 9

Yes, but I'm (personally) less confident that 8.4 + embedded + free trial will get them 100 million. I think it might take the bigger rollout of iOS9 to move the masses (per the draw of other iOS9 features) to push the tally up above 100 million. However, it could happen before iOS9.

Personally, I'm not that impressed with what I've seen about the service so far, but I'll probably take advantage of the free trial for at least a try. When I do, even if I don't use it again after 1 day/minute/second, I'll count in the tally toward 100 million.

 

[Rogifan]

It is but Spotify is already a good service offering choice of use (free w/ ads or paid w/ no ads and extra features). I don't see what Apple is bringing to the table here other than a big sledgehammer to smash the "free" option. Where is the competition? Seems like Apple is entering with brute force.

I don't think it's so much about trying to eliminate free. I think it's Apple's huge war chest which will be used for marketing and exclusives. Plus being a preinstalled app on tens of millions of iPhones. It's hard to fight that.

 

[darcyf]

I hope Apple Music incorporates artist/album descriptions and reviews like the iTunes Store currently does. That's something I currently miss in Spotify while I'm poking around for new music.

So, in other words, it's 7 million tracks that 99% of users will have no interest in listening to.

Consider me part of that 1% I guess since I love a good undiscovered artist. Emphasis on the good, of course. But they're out there and a lot of people are missing out.

Spotify doubled the 10 million paid subscribers it had through May 2014 in just one year,

I wonder how many of those 10 million new subscribers are a result of the three months for 99 cents promotion on now. That's what got me to sign up (never had any interest in an add supported version) and I now know as a result that I'd pay $9.99 for the service. But chances are it'll end up being Apple's...

 

[bobenhaus]

Interesting, I never knew that.

Yeah he is an analyst for Apple.

 

[HobeSoundDarryl]

The question is, how much are they getting paid. I doubt that it's the same amount. And the "Free Model" already had some artists pull their songs of Spotify.

And just to clarify: i'm not against it being free. this was never about me. i'm just wondering if they can keep it up.

Nobody (here) knows an accurate answer to this question. Apparently they are getting paid well enough to allow Spotify to keep doing it that way, even against the backdrop of Apple getting investigated for trying to use it's massive influence to kill such models as part of propping up it's new offering. Ad models can yield good revenues when millions of eyeballs or ears are in place to see or hear ads. Apparently, the music industry likes that amount of revenues enough to not do what Apple wanted and keep such options alive.

As to the free model having some artists pull their songs off Spotify, apparently some relatively big name artists like the Beatles will not be included in the Apple paid streaming model either. Contrary to our speculation, it does not appear to include every artist currently available in the iTunes store. I have seen something that says Taylor Swift will be included in Apple's offering but the Beatles are not included. Is that an Apple win too?

 

[HobeSoundDarryl]

I'm not a music person and maybe spend $10-20 a year on purchasing music. Most of the time in the car I listen to sports games, sports talk, or news. The exception is when taking a road trip.

So Spotify's Ad Based Free option appeals to me. As long as they have that and Apple doesn't provide a free solution I'll stick with Spotify.

I doubt you will be alone. Look at that chart again. You have 2 players with a free* tier and 2 players that are paid-tier only. Compare subscriber numbers. "Free" or even "Free*" is very VERY powerful as evidenced by so many iOS apps choosing the freemium model over asking even a dollar or three for their creations up front. Why do they do that? Because free* works very well. We shouldn't expect it to be different here.

I think Apple will do exceptionally well with their free trial. But then those who decide they like streaming music that haven't already decided will face the option of giving Apple $10/month or switching to Spotify for $0/month. One will offer some benefits that the other won't but will the interested segment decide those benefits are worth the $10 over the price of free or free*? I don't know but that's what it will come down to in the end.

 

[legacyb4]

I, on the other hand, would be foolish to NOT move up from my $9.99 single subscription to a $14.99 family plan to cover my 4-member family and finally get off ad-based streaming for the other 3. Plus, in Canada, Spotify doesn't offer a) student discount nor b) family discount (though they continue to promise it).

They have a loyal customer in me. I would be foolish to relinquish my $4.99 student discount to move up and pay $9.99/mo.

 

[co.ag.2005]

In Denmark several mobile-operators give you free Spotify Premium with your phone subscription. And if you have cable television or a internet connection through others they have their own app with 20-30 millions of songs. Don't think Apple Music will be a hit here. Why pay for something you get for free?

My point being. Isn't this so in many nations?

I'm not sure about other countries across the globe, but I don't think any of the carriers in the USA include Spotify Premium in their subscription rates. T-Mobile (USA) allows certain music streaming services data usage to not count towards one's data allotment in their plans, but that's about it over here.

 

[Monique1]

They have a loyal customer in me. I would be foolish to relinquish my $4.99 student discount to move up and pay $9.99/mo.

Well, if they can't turn a profit from users paying $10 per month how can they survive with people like you? You'd be foolish to think they'll be around much longer.

 

[Shlooky]

I pay for iTunes Match today, so with Apple Music, I can easily cancel that service and pay $10 a month for access to 37M songs.
I also have Spotify (the free service) and didn't find it that interesting.
Glad Apple went this way, as I see Spotify becoming less relevant in the near future.

 

[MH01]

Spotify worried or something? Look at us! Look at us and our numbers! With that said It will be fun to test run Apple's offering for the 3 month trial period.

Spotify have a 2 month free trial. Winner = consumer at the moment

 

[DynaFXD]

So many don't understand this. As consumers, the more competition the better for us....-[snip]..
Competition means more choices, better choices, and lower prices for the consumer. We want more and more competition.

Tell all of this to the mom and pop appliance stores that see a Walmart come to town. Consumers chasing the lowest prices have left complete swaths of town centers gutted. Although I get your point, it is somewhat odd coming on an Apple dominated forum. After all, Apple tends not to chase the "lowest price above all else" crowd.

 

[jcmeyer5]

Spotify operates at a loss due to significant royalties and revenue sharing with music label partners, although the company aims to become profitable through continued subscriber growth.

We lose money on each unit, but make it up in volume???

 

[ChrisNH]

So am I to conclude that if I don't see a piece of music on the iTunes Store, then I won't see it on Apple Music either? There's a band I like (Canadian prog-rock 'SAGA') that is woefully represented on Spotify and about as woefully represented on iTunes. Some new stuff is there, but the better (IMO) stuff from earlier isn't. Before I consider jumping from the Spotify horse I'm riding now to a new pony named 'AppleMusic,' I want to see if Apple represents this band any better than Spotify does. If not, I'm sticking.

 

[Nausicaa]

They have a loyal customer in me. I would be foolish to relinquish my $4.99 student discount to move up and pay $9.99/mo.

They have a loyal customer in me as well, been using it for 3 years and I gladly pay $9.99 for the service. I simply have no desire to switch when Spotify has been working great since day 1 - never had a single issue. Apple, on the other hand, has really started to piss me off - for example the 1GB of RAM on my Air that precludes multitasking on a less-than 2 year old device. I've been a long time customer but I'm getting tired of rewarding this behavior and I'm slowly moving out of Apple's ecosystem.

Also, what's the source for the 37M songs on Apple Music in this graphic?

 

[rmatthewware]

When you're losing money on your product, you can't become profitable by selling more product. Spotify doesn't have a subscriber problem. Their problem is their costs are more than their revenues. They either need to convince record labels to lower their fees or convince their subscribers to pay more.

 

[HobeSoundDarryl]

We lose money on each unit, but make it up in volume???

Or, we lose money quarter after quarter but will cash out with billions when we go public. This might otherwise be known as doing a Facebook. Traditional profitability is not the only driver of the modern Ebusiness. There have been billionaires made without having to make their creation turn a profit. Welcome to the New Economy 2.0

 

[Mackinjosh]

Apple will need deals like Spotify has with Playstation 4 if it wants to unseat Spotify as the top streaming service. But given Apple's other attempts at services, I don't see them pulling it off. They've been too inept too often since Jobs died.

 

[lyricthejoe]

Employed by Starbucks = Free Spotify Premium subscription this fall > Apple Music.

 

[thmshale]

When you're losing money on your product, you can't become profitable by selling more product. Spotify doesn't have a subscriber problem. Their problem is their costs are more than their revenues. They either need to convince record labels to lower their fees or convince their subscribers to pay more.

Based on Spotify's leaked contract with Sony, Spotify pays huge amounts up front to the labels and makes it back through ads and paid subscriptions. Volume would certainly help Spotify in this regard.

 

[Lesser Evets]

... The company announced plans last month to add video programming and podcasts from partners such as ABC, BBC, ESPN, NBC, Comedy Central, Conde Nast, Maker Studios, Turner Broadcasting and Vice Media....

Oh, man. I feel sorry for anyone that spends a second watching any of that dross and believing they are getting something informative or entertaining.

 

[HenryDJP]

They have a loyal customer in me. I would be foolish to relinquish my $4.99 student discount to move up and pay $9.99/mo.

I wouldn't be surprised if we haven't seen the last of the pricing scheme for Music. Apple has a student discount to purchase Macs so it's not like they leave students out in the cold. There may be a student pricing scheme. They won't be undersold to Spotify.

 

[HenryDJP]

How has Apple got 7 million more tracks than any other music service?

How? They've been in the music business selling music much longer than the rest. I'm honestly surprised they don't have more than 7 million above the Spotify.