Spotify Has Twice as Many Paid Subscribers as Apple Music

[Rigby]

For all this talk about billions of potential customers and years of head-starts... I think we're ignoring one simple thing:

There are only 45 million paying customers of on-demand streaming music on Earth.

According to IPFI there are actually 68 million:

http://ifpi.org/news/IFPI-GLOBAL-MUSIC-REPORT-2016

Perhaps paid music streaming is not, and will never be, a big industry overall.

Currently it's the biggest growth driver for the music industry. From the link above:

"

• Digital sales contribute 45 per cent of industry revenues; overtake physical's 39 per cent share
  
  
• Streaming revenues up 45.2 per cent, helping to drive 3.2 per cent global growth
  

[...]
Helped by the spread of smartphones, increased availability of high-quality subscription services and connected fans migrating onto licensed music services, streaming has grown to represent 19 per cent of global industry revenues, up from 14 per cent in 2014. Streaming now accounts for 43 per cent of digital revenues and is close to overtaking downloads (45 per cent) to become the industry's primary digital revenue stream."

 

[bushido]

You can't use your phone at work? Not dismissing there is no browser interface .... but still a valid question.

no wifi for my phone at work

I don't know what company you work for but where I work our corporate internet would never even allow me to get to Spotify. Same with YouTube, streaming radio stations and just about any social network outside of LinkedIn.

i am working in online marketing, so neither of those sites can be blocked cuz i also need them to work. my old company was even less strict, everyone had their MacBook and iMac and one could do whatever with it. We even stored our files in Google Drive lol now at my new company i am stuck with a Dell. Unrelated to the topic but THE worst

 

[DJ Dilbert]

Actually, not surprising considering Apple Music is a massive mess from UX and UI point of view. Just my .02.

Definitely agree with this POV. Spotify is much easier to use and segregate music than Apple Music. Although I'm one of the idiots that has an account with both because I can't make up my mind yet. On one hand, it's easier to use Spotify, but it's easier to integrate my purchased music with streaming on Apple Music.

I wish one or both would make a conversion app like Spotify used to do years ago to match my iTunes library with songs on their service. Now if Apple would make something that would scan my Spotify library and match to theirs and even recreate my Spotify playlists, then we'd have a winner.

 

[lagwagon]

I think they need to decouple the player from the operating system.... why do I need to wait for iOS 10 for an upgrade on the service? Also, the service needs to become more social..... I love that my friends on Spotify can send me playlists and I can see what they're listening to (i find a lot of good music this way).

Apple Music can't even match the current feature set in Spotify.... when in reality they really need to exceed and enhance the Spotify player.

You can share playlists now in iOS 10

 

[Michael Scrip]

According to IPFI there are actually 68 million:

http://ifpi.org/news/IFPI-GLOBAL-MUSIC-REPORT-2016

Thanks for the link

My point is still the same though.

68 million people pay for streaming music... yet there are billions of people who like music, right?

There were 300 million smartphones sold just last quarter that can play streaming music. And billions more existing devices that can play streaming music too.

68 million still seems low, overall.

But hey... Apple Music represents 22% of the global paid music streaming market! After just a year!

 

[oneMadRssn]

Yeah, looking at Spotify's prices for family plans, it's twice that, at best.

What do you mean? Spotify's family plans are exactly that - $15/month for 6 users.

 

[Armandodj]

I love Spotify, at this point I would not change my service to Apple Music, when my time is up goodbye Apple Music, unless you can bring something really strong this coming fall. Also I am not an Apple hater but they could done a better job with the interface, and worst part is they shouldn't mixed ITunes with Apple Music never like that idea. In the meantime Spotify still the winner for me, at this point and I love to use it in all my devices.

 

[Loge]

Aren't songs around $1 a piece?

It depends. If you buy albums, collections, box sets etc. it can work out considerably less than that.

 

[Michael Scrip]

It depends. If you buy albums, collections, box sets etc. it can work out considerably less than that.

He did use the term "individual songs"

So...

I was just looking at the cost of obtaining those 1,000 songs... and the fact that you'll only be able to listen to just those 1,000 songs.

For the same amount of money... you can subscribe to a music streaming service for a few years and be able to listen to 30 million songs.

He said buying songs was "cheaper"... but my point was he's not comparing the same things.

 

[Rigby]

But hey... Apple Music represents 22% of the global paid music streaming market! After just a year!

Yes, but they also have the most to lose as the market is shifting from digital purchases to subscriptions, since they are the market leader on digital sell-through by a large margin. By hesitating so long to bring their own subscriptions service (probably out of fear of cannibalizing the iTunes store sales) they allowed Spotify to become this big in the first place ...

 

[eoblaed]

What do you mean? Spotify's family plans are exactly that - $15/month for 6 users.

Ah, I see. They dropped the price last month to match Apple's pricing. Prior to that, it had been over double Apple's pricing.

From http://www.cnet.com/news/spotify-family-plan-drops-to-15-per-month-for-up-to-6-people/
"Music-streaming service Spotify on Monday dropped the price of its Family Plan down to $14.99 (£14.99 or AU$17.99) per month for up to six people -- the exact same pricing offered by Apple Music. Spotify's previous plan meant that six people sharing an account would have been charged $34.99 per month."

 

[Zirel]

The Spotify app is flawless, I have yet to encounter a single issue.

1. Doesn't let you upload your music from the desktop app
2. Doesn't have beats 1 radio
3. Doesn't have the high-profile exclusives that Apple has
4. Spotify Radios throw a lot of crap at you

Both Apps are good as it gets, specially the iOS 10 version. It's more a question of content.

 

[Solomani]

Spotify year-on-year revenue loss = some 3rd rate Chinese tech company will buy them out in the next few months.

 

[vertsix]

1. Doesn't let you upload your music from the desktop app
2. Doesn't have beats 1 radio
3. Doesn't have the high-profile exclusives that Apple has
4. Spotify Radios throw a lot of crap at you

Both Apps are good as it gets, specially the iOS 10 version. It's more a question of content.

1. Yes it does.
2. People actually listen to Beats 1?
3. Not true, Spotify has more.
4. I disagree, good for discovering new music.

 

[deany]

Spotify needs to start offering 20% off vouchers in the UK every 3 months or so.
iTunes vouchers are readily available with 20% off, making apple music £8.00 a month.

Spotify will lose customers to apple if they don't start vouchers/cards.

£8.00 v £10.00 is a 'no brainer'

 

[Michael Scrip]

Yes, but they also have the most to lose as the market is shifting from digital purchases to subscriptions, since they are the market leader on digital sell-through by a large margin. By hesitating so long to bring their own subscriptions service (probably out of fear of cannibalizing the iTunes store sales) they allowed Spotify to become this big in the first place

Like we've said... Spotify is "big" but they've also got some scaling problems as they keep getting "bigger"

"Number of users" means nothing if they don't bring in the dollars.

Apple may have hesitated... but they decided to launch a paid-only streaming service that has none of the baggage Spotify has to deal with (losing money on a free-tier)

Would Spotify be as "big" today if they didn't have the free-tier?

And yes... the market is shifting. But Apple has its feet in both camps. iTunes Music is profitable... and Apple Music streaming is likely profitable too. ( I don't know why it wouldn't be)

But nothing Spotify is doing is profitable as of yet.

 

[Rigby]

Like we've said... Spotify is "big" but they've also got some scaling problems as they keep getting "bigger"

Apple may have hesitated... but they launched a paid-only streaming service with none of the baggage Spotify has to deal with (losing money on a free-tier)

Would Spotify be as "big" today if they didn't have the free-tier?

You just made the argument that the ad-supported tier isn't just baggage. It brings in new customers (a part of which will be converted to paying customers), and there are still many possible ways to monetize the non-paying customers in the future.

And yes... the market is shifting. But Apple has its feet in both camps. iTunes Music is profitable... Apple Music streaming is likely profitable too. ( I don't know why it wouldn't be)

If subscriptions take over, Apple will be delegated from the dominating player to an also-ran with lots of competition (it's not just Spotify, but also Google, Amazon, Microsoft and a number of smaller players that are smelling blood). Apple Music is primarily a defensive play to stop the bleeding.

 

[ArtOfWarfare]

Lyrics are powered through Genius when on mobile (in Spotify) but it's there.

That's limited to top rap songs or something, isn't it? I don't listen to rap (or top songs). On the computer version of Spotify, it's able to pull up lyrics from Musixmatch. On mobile, the option just isn't there...

 

[Drestin-Black]

I had the free trial and tried it once, did not like it. I much prefer spotify or even pandora.

 

[Zirel]

People keep saying this as if it was a bad thing. They have pioneered this market for everyone else, including Apple. And they are growing roughly at the same pace as Apple Music in terms of subscribers, so I don't think Apple will surpass them anytime soon. But we'll see.

At the same pace as Apple?

October 2015 : Apple had 6.5 million paid subscribers, Spotify had 20 million paid subscribers [source]
June 2015: Apple has 15 million paid subscribers, Spotify has 30 million paid subscribers.

8 months period
Apple growth rate: 130%
Spotify growth rate: 50%

1 month period
Apple growth rate: 11%
Spotify growth rate: 5%

At this rate, Apple will catch Spotify in about 12-13 months!

 

[Chupa Chupa]

Calm before the storm. Just you wait when Apple gets that drug induced, rape-a-thon, murder-fest Dr. Dre sitcom in the can. Ah, who am I kidding.

 

[harley3k]

Actually, not surprising considering Apple Music is a massive mess from UX and UI point of view. Just my .02.

Exactly - I tried AppleMusic when it came out - couldn't wait to get my streaming from my preferred ecosystem, but it just didn't cut it. Ran back to Spotify after the trial ended.

Spotify has the advantage of when you drop down to the free-teir your playlists are all still playable (with ads), where as AppleMusic has no free teir and when I cancelled my playlists were useless.

 

[Michael Scrip]

You just made the argument that the ad-supported tier isn't just baggage. It brings in new customers (a part of which will be converted to paying customers), and there are still many possible ways to monetize the non-paying customers in the future.

Yeah... didn't Spotify think podcasts were a way to make money?

As for bringing in new customers... how much money has Spotify spent on the free tier for the possibility to convert free customers into paid customers?

They're spending investors' money. $500 million here... a Billion there...

And they're still not profitable after 8 years.

That's the baggage I was talking about that Apple didn't have to deal with.

If subscriptions take over, Apple will be delegated from the dominating player to an also-ran with lots of competition (it's not just Spotify, but also Google, Amazon, Microsoft and a number of smaller players that are smelling blood). Apple Music is primarily a defensive play to stop the bleeding.

If streaming takes over (it will take MANY years for people to stop buying music) Apple will be fine.

I don't think Apple gets into any business to lose money. They have a plan.

Assuming Spotify becomes profitable... Apple will be the #2. Not bad. It wouldn't be the first time Apple is #2.

Or who knows... maybe Spotify can't make ends meet... and they get sold off to some other company and people get scared and leave.

It's also tough to use the term "also ran" when discussing Apple though. They'll be very successful in whatever they get their hands into.

 

[alexgowers]

They both pay too little for streaming compared to broadcasters it's basically daylight robbery. The revolution that was the internet is now just companies sucking money out of the creative industries. We seem to value truly talented individuals as disposable. Look at how poorly 3D artists in the movie industry are treated and paid, the vast sums of money are no longer trickling down as it used to. The rich are getting richer and the middle class is being pushed into poverty. Both these services are part of the problem.

 

[littyboy]

I'm with Spotify right now, only because i was given 2 years of premium for free. After that I think I'll just go back to my stored iTunes library.

I just got Spotify. The one thing I like about it is the normalization of volume. You can't fully achieve that with iTunes library, which is annoying af, even with "sound check" on.