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

[vicsara]

The reason Spotify and Pandora had a chance to gain a stranglehold over the subscription music market was due to their freemium-based business model. I'm sure they've done the buesiness analysis, but does Apple expect existing/paying Spotify and Pandora users to suddenly drop those tried and true platforms and jump ship to Apple's new service (which is essentially the same thing?)

I don't blame Apple for at least exploring the monthly pay model and starting new users off with 'first three months free', but after all, Apple is very late to this market. If it's a bust and Apple can't move the needle, I expect them to include an ad-based free version in addition to subscription.

Pandora is just a crap nothing more I tried it the day it was introduced and tried recently but did not like it. at the moment Spotify is no 1 and will remain for good time, until apple comet for some discount program like student or something. Applaud to spotify's extreme quality and the way it finds the other songs or album playing but i hate the UI in my iPhone 6 plus as i hate back back and back and tap tap tap on top left corner........

 

[Ludatyk]

The reason Spotify and Pandora had a chance to gain a stranglehold over the subscription music market was due to their freemium-based business model. I'm sure they've done the buesiness analysis, but does Apple expect existing/paying Spotify and Pandora users to suddenly drop those tried and true platforms and jump ship to Apple's new service (which is essentially the same thing?)

I don't blame Apple for at least exploring the monthly pay model and starting new users off with 'first three months free', but after all, Apple is very late to this market. If it's a bust and Apple can't move the needle, I expect them to include an ad-based free version in addition to subscription.

Only time will tell if users will jump to Apple new service... But the deciding factor is the family plan Apple offers. I'm sure Spotify will try to match Apple's family plan... But I doubt they will.

In this day in age, customers are winning due to these companies providing competitive pricing. I'm sure lots will give it a try given the 3 month trial Apple provides...

 

[neuropsychguy]

how is the book calculated? do they consider investment when they calculated profit?
any idea?

That commenter was wrong. Spotify is still operating at a loss.

 

[skellener]

 Music = Ping 2

 

[HobeSoundDarryl]

Like they sell user data?

What other revenue streams do they have? The subscription customers are likely profitable it is the other 60 million that are a problem. Ads don't cover their costs.

Spotify needs to convert a much higher percentage of their users to subscriptions to become profitable. With Apple music this has become more difficult. Also they should have already went public before this happened. It is unlikely the existence of Apple music leads to a more successful Spotify ipo.

It is pretty much fait accompli apple will have more paying subscribers than Spotify in October.

I don't know. I think there is a high chance that Apple will have more paying subscribers than Spotify because Apple is embedding Music into iOS9 where Spotify must depend on people downloading their App and not enjoying certain benefits of OS integration. That is just IE vs. Netscape again. IE won more users not because it was superior to Netscape but because it was the default. Apple Maps won more users not because it was better than Google Maps but because Apple made it the default and embedded in into the OS.

Frankly, why does this even matter? It's like we're trying to prop up the appeal of Apple's offering because it is likely to be more profitable than Spotify's model. Who cares? Why is maximizing Apple's profitability good for us consumers? If this completely fails, Apple will still be fine. Or even if you own some shares of AAPL, the amount of profit made on this streaming music service is probably going to barely contribute to a dividend or the share value. And if you are a pure consumer (holding no AAPL), why is this so important?

Spotify will be fine. They are NOT a public company so maximizing short-term profitability is not their driving objective (unlike Apple). They want to build up a massive user base to do a Facebook when they IPO. Their "shareholders" (owners) are riding a regularly unprofitable business with multiple billion dollar valuations. They will eventually IPO and make a fortune. Their "shareholders" will be far more enriched than us AAPL shareholders can be enriched even if this music service succeeds beyond anyone's wildest expectations.

If Apple wins more paying subscribers than Spotify, good for Apple. If Spotify wins more paying subscribers than Apple during this period, good for Spotify. What's good for us customers is having more than one option for this kind of service, with prices ranging from $10/month all the way down to ad-supported free. We (consumers) win with choices and varied pricing including free options.

 

[Chupa Chupa]

but if spotify is able to keep the free tier, it could be free for the whole family (like it is now, if you choose)

I hope the models stay how they are so the consumer can get some differentiation between the services

I'd rather have a free tier somewhere, than family plans on all services

Spotify, Pandora, etc., CAN keep it's basic free tier. What it can't do is add a "premium" family plan like Apple has w/o amending it's contract with the music labels. And do that surely they are going to insist Spotify drop it's free tier.

 

[bawbac]

Our sentiment here- always being so pro-Apple- seems to be in a Spotify is now an enemy because Apple has something that directly competes with them. But if one can set aside their Apple-bias for a moment, any negative wishes for Spotify is simply wishing away a pretty comparable streaming music service that is available for as little as free or free* so that a very, very profitable company can make even more money. How do we consumers win by wishing away options that would cost us less than Apple's offering? Isn't it better (for us consumers but not necessarily Apple Inc.) to at least have options?

If Apple's offering is superior to Spotify, Pandora, etc, it should win on it's own merits. All this fault finding with Spotify, Pandora, etc as part of rationalizing Apple's new offering is both par for the course and mostly about trying to trample the relatively small competitors to further enrich the giant. If Apple's offering is worth $10/month, it doesn't need us to prop it up with spin or competitor beat-downs. And if it's not worth $10/month, it certainly is good that those who want some kind of streaming music service have more choices than just one.

Anyone remember how great Netflix use to be with DVD/Blu-ray subscription service when BlockBuster was around.
Now that they have virtually no competition, Netflix disc subscriptions are awful.

Apple will try to bleed everyone dry out of cash with their tactics and services only to provide satisfactory service once they kill other services.

Apple at a corporate level are no more than a new Mr.Potter.
They will soon no longer cater to us that make less than $100K a year because we are mere peasents who can not afford their products... unless FINANCED/SUBSIDIZED!

 

[vicsara]

The reason Spotify and Pandora had a chance to gain a stranglehold over the subscription music market was due to their freemium-based business model. I'm sure they've done the buesiness analysis, but does Apple expect existing/paying Spotify and Pandora users to suddenly drop those tried and true platforms and jump ship to Apple's new service (which is essentially the same thing?)

I don't blame Apple for at least exploring the monthly pay model and starting new users off with 'first three months free', but after all, Apple is very late to this market. If it's a bust and Apple can't move the needle, I expect them to include an ad-based free version in addition to subscription.

apple is not late, apple is on right place at right time. they did not buy Beat for their Headphones lol..... they envision it.

yes not all music on iTunes will be available for stream and it should be that way.... group like Beatles and pink floyd and other legends should be respected. Spotify do not have Pink Floyd... search it spotifier........

 

[vicsara]

Anyone remember how great Netflix use to be with DVD/Blu-ray subscription service when BlockBuster was around.
Now that they have virtually no competition, Netflix disc subscriptions are awful.

Apple will try to bleed everyone dry out of cash with their tactics and services only to provide satisfactory service once they kill other services.

Apple at a corporate level are no more than a new Mr.Potter.
They will soon no longer cater to us that make less than $100K a year because we are mere peasents who can not afford their products... unless FINANCED/SUBSIDIZED!

Not true..... apple made it possible that everyone can afford apple products.
iphone for 99 cents, ipod for $79 or even $49 gorgeous macbook for 1k. and mind you it cost to make something beautiful like apple products.

I still have 2001 powerbook in white and 2003 silver powerbook and they still runs and looks new.......

 

[HobeSoundDarryl]

The worst thing for Spotify is s bunch of people trying streaming for the first time w Apple music then switching to the free tier of Spotify. Spotify loses money on free tier users. So while apple will likely take some percentage of profitable subscribers from Spotify it will dump a bunch of unprofitable free users on them?

That would be a disaster for Spotify. I already said that this is likely to tilt the balance of free the paid Spotify users even further to the wrong direction. What a disaster. Yet you are hoping for it like it will help Spotify instead of hastening their demise.

I don't think you understand that the free tier is the albatross around spotify's neck. The only reason Spotify offers a free tier is to try and convert them to subscribers. If they just grow the free tier while losing paying subscribers to apple their business will spiral out of control.

It really seems most people here touting the virtues of spotify's free tier don't understand why it exists and don't understand the consequences of that userbase growing without a much higher conversion to subscriber rate than Spotify has seen to date.

It seems pretty obvious now why one of the reasons apple did not go with a free tier is by not offering it they just tighten the noose around spotify's neck. Spotify already does not convert near enough free users to subscribers, add in a large competitor who will take away some existing customers and some potential conversions and Spotify is in trouble.

Apple would love for everyone who can't afford streaming to sign up for free Spotify. It will hasten their demise.

Believe what you wish. If I'm Spotify, I would love it if Apple could get hundreds of millions of people to try Music and then decide they want my $0 Spotify streaming offering. I'd then rush my IPO on the strength of David seeming to beat Goliath on popularity and cash out HUGE... just like Facebook.

I understand subscription models better than just about anyone. I have great experience helping companies innovate, implement and grow subscription models. I know them inside out and I understand both what you are saying (and appreciate why you believe what you believe). I also know that Spotify will be thrilled to get a huge lift by people trying Apple's free trial and then deciding to continue on with Spotify's free tier.

You seem to see Spotify as an enemy. No surprise (because Apple is now directly competing with them). I see Spotify as just another option, much like I can see Samsung or Google or Microsoft as alternatives to Apple offerings. That doesn't mean I'm arguing that offerings from Samsung or Google or Microsoft of Spotify are SUPERIOR to Apple's offerings but that they are just consumer options. It's very good for consumers to have options. When any one company has ever thoroughly dominated any market, consumers pretty much ALWAYS LOSE.

Apple is not the little guy anymore. They are not the underdog. They are the 64,000 LB Gorilla or they are Goliath in many of the spaces in which they compete. Some of what they are doing seems fantastic for us consumers but other stuff isn't. They don't have to always be 100% right, nor are they always 100% wrong. Wherever each of us would put them on that scale for any given thing, we win by having choices other than Apple. Whether we choose to go with a non-Apple choice or with Apple is only important to each of us as individuals.

 

[Nozuka]

Only time will tell if users will jump to Apple new service... But the deciding factor is the family plan Apple offers. I'm sure Spotify will try to match Apple's family plan... But I doubt they will.

In this day in age, customers are winning due to these companies providing competitive pricing. I'm sure lots will give it a try given the 3 month trial Apple provides...

i think most of the people are going to be NEW streaming users. this marked is still largely untapped.
alot of people never bother trying a different service like spotify, when buying songs in itunes has been working perfectly fine for them. but if this function is suddenly available at the same "place" they always used go and the free trial is activated with a simple push of a button, alot of them will give it a try.

 

[2010mini]

Spotify isn't going anywhere any time soon. The labels practically own Spotify. Plus the fact the free tier they have keeps users in and will balk at paying $10 for Apple's ecosystem. I don't see Apple gaining much traction because of this. If you're already paying for Spotify, then Apple Music is a no brainer if you're on iOS. If you're trying to convert Spotify free users to Apple Music, good luck.

I don't think Apple is focusing on converting Spotify customers. I think they are more focused on getting artists to sign exclusives and utilize Connect for even more exclusive content. That is what will get them customers.

 

[HobeSoundDarryl]

i think most of the people are going to be NEW streaming users. this marked is still largely untapped.
alot of people never bother trying a different service like spotify, when buying songs in itunes has been working perfectly fine for them. but if this function is suddenly available at the same "place" they always used go and the free trial is activated with a simple push of a button, alot of them will give it a try.

That's right and that's how Apple will easily get it's 100 Million number. Embed it in iOS 9 and give it away for 3 months. Why won't anyone- even those completely happy with a competitor product- at least give it ONE try. And one try- even for one second- will count to the 100 Million number. Apple will then be able to claim more Music users than any other streaming service and that they got their faster than any other streaming service. That will sound great in the marketing spin.

 

[2010mini]

Believe what you wish. If I'm Spotify, I would love it if Apple could get hundreds of millions of people to try Music and then decide they want my $0 Spotify streaming offering. I'd then rush my IPO on the strength of David seeming to beat Goliath on popularity and cash out HUGE... just like Facebook.

I understand subscription models better than just about anyone. I have great experience helping companies innovate, implement and grow subscription models. I know them inside out and I understand both what you are saying (and appreciate why you believe what you believe). I also know that Spotify will be thrilled to get a huge lift by people trying Apple's free trial and then deciding to continue on with Spotify's free tier.

You seem to see Spotify as an enemy. No surprise (because Apple is now directly competing with them). I see Spotify as just another option, much like I can see Samsung or Google or Microsoft as alternatives to Apple offerings. That doesn't mean I'm arguing that offerings from Samsung or Google or Microsoft of Spotify are SUPERIOR to Apple's offerings but that they are just consumer options. It's very good for consumers to have options. When any one company has ever thoroughly dominated any market, consumers pretty much ALWAYS LOSE.

Apple is not the little guy anymore. They are not the underdog. They are the 64,000 LB Gorilla or they are Goliath in many of the spaces in which they compete. Some of what they are doing seems fantastic for us consumers but other stuff isn't. They don't have to always be 100% right, nor are they always 100% wrong. Wherever each of us would put them on that scale for any given thing, we win by having choices other than Apple. Whether we choose to go with a non-Apple choice or with Apple is only important to each of us as individuals.

You speak a lot of truth here. But is Spotify that is Goliath in the streaming world.

 

[Macula]

Spotify today announced that it now has more than 75 million active users and 20 million paid subscribers worldwide…

I wonder who is paying those paid subscribers.​

 

[HobeSoundDarryl]

You speak a lot of truth here. But is Spotify that is Goliath in the streaming world.

I guess it could be seen that way TODAY. But I have no doubts that Spotify and Pandora, etc are shaking in their boots as Apple's offering is approaching the marketplace. They have absolutely no way to compete with this competitor embedding it within iOS9 and making it a default option that will be regularly pitched with a 3-month free trial.

From their perspective, Goliath is coming to try to eat their lunches. They are unable to compete head-to-head because of the embedding, much like Netscape could not compete against IE being embedded as default in Windows. At the time, Netscape might have been cast as THE browser Goliath too but we saw how that played out once the newcomer (Microsoft) entered the battle.

I see Spotify as very much the underdog here because it can't directly compete in key ways. That's why I keep saying Apple will quickly get their 100 million number. I don't even think that will be very hard for Apple to do... much like Maps become HUGE by being made default and embedded through iOS.

 

[mac-jones]

I'm a Spotify Premium member and pay the monthly cost for my brother and I separate accounts ($20 per month). I've enjoyed the service, but based on Apples WWDC, I will be canceling my sub to Spotify and going with the Apple Music family plan after the 3 month trial. Time will tell though which is truly the best....

 

[gotluck]

Spotify, Pandora, etc., CAN keep it's basic free tier. What it can't do is add a "premium" family plan like Apple has w/o amending it's contract with the music labels. And do that surely they are going to insist Spotify drop it's free tier.

from what I've read when spotify's current contracts end, the free tier is as good as gone, regardless of the family plan. Or at least that was the speculation on this site

 

[rulymammoth]

Pandora is just a crap nothing more I tried it the day it was introduced and tried recently but did not like it. at the moment Spotify is no 1 and will remain for good time, until apple comet for some discount program like student or something. Applaud to spotify's extreme quality and the way it finds the other songs or album playing but i hate the UI in my iPhone 6 plus as i hate back back and back and tap tap tap on top left corner........

i agree that pandora sucks. I'm not even really sure how it competes and is still around. Although I have concerns about Spotify as well. Something tells me that if you already have 75 million subscribers and you're still not turning a profit, you're not in such a good business.

 

[Ludatyk]

from what I've read when spotify's current contracts end, the free tier is as good as gone, regardless of the family plan. Or at least that was the speculation on this site

I don't think they totally drop their free tier... It would definitely alienate Spotify's users.

I think Spotify's free tier is the best thing going for them... They won't be able to match Apple's Family Plan without dropping their free tier, which I'm sure Spotify wouldn't want to do..

 

[Razeus]

You realize Spotify is losing money on those free users right? Spotify's business plan revolves around converting those free users to paid users but with Apple music as an alternative that has become even more difficult.

The reality is the amount of money Spotify is losing per user is likely to go up, not down. That is not a good trend.

Not my problem. That's what Spotify chose. They keep saying they'll make money when they increase subscribers, but yet the latest numbers suggest that's still not the case. How about the tell investors exactly what that number is in which they'll make money. I think Apple Music is going to bring a nice slow down to Spotify reaching that number.

 

[Razeus]

Not without Android on board. I give them a year to reach what Spotify did in 5.

 

[falconman515]

Why Is TIDAL even on this list?

It's a non factor non competing company

I can't wait till that junk service just Tanks

 

[Razeus]

You guys, as well as Apple, terribly underestimate the power of free. Google understands the power of free. Looking at the numbers, people like free and I see it staying that way for a while.

 

[Ludatyk]

You guys, as well as Apple, terribly underestimate the power of free. Google understands the power of free. Looking at the numbers, people like free and I see it staying that way for a while.

I agree... The free tier is the most compelling aspect for Spotify, yet the family plan Apple offer is great as well.

We are all here discussing Apple Music, but it's not even out yet to be judged appropriately lol