Spotify Reaches 113 Million Paying Subscribers, Says It's Growing Twice as Fast as Apple Music

[ani4ani]

So they have 100% more paying customer, they pay less to authors and yet they are not making any money at all. I wonder what are they doing wrong.

it can only mean that Apple, who have less subscribers and supposedly pay more per stream are losing even more money on Apple Music?

 

[Netgran]

Too bad they're not so quick (if at all) about paying the artists who provide the material! Spotify is Very Slow to remunerate musicians. They should be a priority!

 

[MauiPa]

So much for their fake whining about anti-trust!
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DNichter stated that Spotify doesn't make any money. I stated that Spotify had net income of $267.5 million for the quarter.

Net income = net profit from entire business

Interesting! Operating profit is profit from on-going businesses, the fact that net income was ~$200 greater than operating profit, means there are some serious gains from non-operations doesn't it? Did they sell businesses?

 

[Duckyduckbumps]

I switched to AM mainly because of the annoying 10,000 song library limit in Spotify.

Apple is also a lot less strict about what constitutes a family. Ours is split up in All kinds of ways, but at least music might unite us.

I also like the lack of social features haha. And I know what kind of music I like. Contemporary pop is made by machines, for machines imho.

 

[TheLunaPark]

I wouldn't be surprised if at some point in the near future the music streaming industry goes the way of the the film and tv industries where you have content - in this case music - produced by the same companies that own the streaming services. Perhaps Apple or Spotify will purchase a major label and make their artists exclusives for their respective streaming services. I personally would hate that situation but who knows. I just hope Spotify can find a long term solution profit-wise.

 

[Dahl]

Not surprised. Spotify has an uncanny ability to push music that you might actually want to listen to more often than not. Other services, like Apple Music you either get stuck listening to popular music or end up hunting fruitlessly for new music.

Think that's a very personal take on it. I'm on both platforms, but only pay for Apple and I've found a TON of new music on Apple Music.

 

[TopherMan12]

DNichter stated that Spotify doesn't make any money. I stated that Spotify had net income of $267.5 million for the quarter.

Net income = net profit from entire business

Gotcha. These interchangeable economic terms can get a little crazy.

 

[Sam in SoCal]

I have one of Verizon’s unlimited plans and Apple Music comes with it for free. Thats a win over any other streaming service for me

 

[0837990]

Spotify is bad for artists. Spotify literally pays artists HALF of what Apple Music pays artists every time a song is streamed. HALF. And you thought Apple was greedy. Spotify is twice as greedy, and in some countries, like Norway for example, Spotify even charges more per month than Apple Music (AM 99 NOK, Spotify 109 NOK).

If you want to support the creators of your music you should consider switching from Spotify to Apple Music.

 

[Plutonius]

I think that the main concern for Spotify shareholders is that Spotify shows a profit.

Larger numbers of customers is great only if it translates into large earnings.
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Which means they’re going to have to change. I see only three options - increase prices, reduce services or dump their ad supported tier (or a mix of all three).

I predict that Spotify gets bought out.

 

[canadianreader]

Spotify interface is so much better and more intuitive than Apple Music.

 

[Plutonius]

So they have 100% more paying customer, they pay less to authors and yet they are not making any money at all. I wonder what are they doing wrong.

The margins are too small unless they find a new way of monetizing the service.

Apple is diversified so that they aren't relying on just Apple Music.

 

[LeeW]

I have tried Apple Music a couple of times, it just does not match my music tastes even closely compared to Spotify, I can rely on the suggested playlists every time. I am always trying to find the music I want with Apple manually. And of course, I can play Spotify easily across a range of devices.

My only concern with Spotify is how long they will last, considering they don't make any money

"Spotify has announced a gross profit of $490 million on revenues of $1.92 billion for the quarter ending September 30."

Swings and roundabouts, Spotify is going nowhere though. Apple being the closed company they are don't publish numbers but all analysts agree on one thing, Apple is losing money on their music service, they need way higher subscribers but will struggle to get them anytime soon.

None of them is saints, Apple may pay more but look at the numbers up to end of 2018.

Apple paid $0.00735 per play, Spotify $0.00437, you are looking at about 200k plays for an artist to receive around $1,500 whilst on Spotify they need 335k plays. There is an argument that Spotify ultimately pays more to the artist than Apple will simple as they have a far bigger audience.

The other overlooked element is that Apple and Spotify (Most services to be fair) work on a pro-rata system, i.e. total listening numbers. So even if you don't listen to the most listened to artists, part of your sub goes to them, the artists you do listen to may get very little in comparison even if you never listen to others. It is estimated that around 70% of all revenue goes to 1% of artists.

 

[BlueCreek]

Main reason I have not switched to AM is that god awful white on pink Interface

It looks great with dark mode activated

 

[DNichter]

I have tried Apple Music a couple of times, it just does not match my music tastes even closely compared to Spotify, I can rely on the suggested playlists every time. I am always trying to find the music I want with Apple manually. And of course, I can play Spotify easily across a range of devices.



"Spotify has announced a gross profit of $490 million on revenues of $1.92 billion for the quarter ending September 30."

Swings and roundabouts, Spotify is going nowhere though. Apple being the closed company they are don't publish numbers but all analysts agree on one thing, Apple is losing money on their music service, they need way higher subscribers but will struggle to get them anytime soon.

None of them is saints, Apple may pay more but look at the numbers up to end of 2018.

Apple paid $0.00735 per play, Spotify $0.00437, you are looking at about 200k plays for an artist to receive around $1,500 whilst on Spotify they need 335k plays. There is an argument that Spotify ultimately pays more to the artist than Apple will simple as they have a far bigger audience.

The other overlooked element is that Apple and Spotify (Most services to be fair) work on a pro-rata system, i.e. total listening numbers. So even if you don't listen to the most listened to artists, part of your sub goes to them, the artists you do listen to may get very little in comparison even if you never listen to others. It is estimated that around 70% of all revenue goes to 1% of artists.

Yea I saw the press release today, good on them. Competition is good, I just wasn’t sure if they were going to be around for the long haul.

 

[ipponrg]

Spotify is bad for artists. Spotify literally pays artists HALF of what Apple Music pays artists every time a song is streamed. HALF. And you thought Apple was greedy. Spotify is twice as greedy, and in some countries, like Norway for example, Spotify even charges more per month than Apple Music (AM 99 NOK, Spotify 109 NOK).

If you want to support the creators of your music you should consider switching from Spotify to Apple Music.

If you really want to support the creators, purchase their albums, clothing, and tickets.

 

[Carnegie]

Both Apple Music and Spotify pay artists the same amount. Streaming rights cost is, oddly, set by law and all companies must pay the same amount.

Yes, the licensing cost for songwriter's rights is, in the U.S., set according to law. But the licensing cost for recording rights, which is by far the bigger piece of the licensing pie, is not set according to law. That is negotiated.

That said, Spotify and Apple almost certainly pay in the same ballpark (in terms of percentage of subscription fees) for recording rights for their paid services. But what that translates into when it comes to average cost-per-stream can vary based on, e.g., average streams-per-paid-account on the respective services. The cost isn't paid on a per-stream basis, it's paid (for the most part) as a percentage of subscription revenue.

Spotify also has an ad-supported service which would affect the overall average cost-per-stream paid by Spotify relative to Apple.

 

[jimbobb24]

I switched from Spotify to Apple Music. The ability to stream my iTunes playlists over multiple devices was too amazing. Used to go to Spotify for new music but sometime ago I quit that too. AM is doing pretty great.

 

[notdave]

Now if they would just add lyrics it would be perfect.

 

[T-R-S]

Millions for Spotify exec's pennies for Sopify artists I get paid double from Apple vs Sopitify I own a label and we pulled all of music from Spotify...

 

[Coconut Bean]

Daniel Ek is an entitled whiner.

Although we typically only hear about him on MR when he complains about Apple, the fact is he whines about everything. He’s constantly after the Swedish government saying they should do more to help his company with things like rent/housing, education (schools should teach programming earlier so he can hire staff from Sweden) or financial regulations so it’s easier to pay stock options to employees.

And then uses the ever-present threat of “pulling his company out of Sweden” if things don’t change.

Some of the points are valid. Teaching programming is a common opinion from not only tech executives. And the housing market of Stockholm has one of the highest risk for a bubble as of lately.

If Sweden or in particular Stockholm, tries to be the silicon valley of Europe then some reform is needed when it comes to how to create an attractive business environment. Don't misunderstand me, Sweden is amazing thanks to many rights that makes your overall life easier, but if you are a young code monkey at Spotify, with a very good starting salary, you will have a comfortable life, but you will never be rich.

 

[Neepman]

The Apple music interface is awful. End of story.

 

[laurieballard]

We (as a family) gave Apple Music a go for the past month after using Spotify for over two years, I liked the idea of keeping everything within the Apple EcoSystem considering the Apple TV's, iPhones, iPads and Macbooks we have.

Put it this way, I ended the trial after a few weeks and went back to Spotify. Not even close for us.

 

[Mitch Conner]

Spotify:

Relative to Apple, the publicly available data shows that we are adding roughly twice as many subscribers per month as they are.

I don't know what publicly available data Spotify is looking at because that's not what I'm seeing. I've collected all the publicly announced numbers of paying subscribers of both Apple Music and Spotify (it's been like a semi-hobby of mine for years now). And those numbers show that Spotify had been adding new subscribers about 1.66 times as fast as Apple Music in the first half of 2019, but the latest number (113M) they just announced actually represents a clear dip from that earlier trend. Apple hasn't released their numbers since the last summer, but based on how linear Apple Music's trend has always been, it's very unlikely that Spotify could have been growing twice as fast as Apple Music these past four months. Here's the current graph and data:

YYYY-MM Apple Music Subscribers (Million)
2015-06 0
2015-10 6.5
2016-01 10
2016-02 11
2016-04 13
2016-06 15
2016-09 17
2016-12 20
2017-06 27
2017-09 30
2018-02 36
2018-03 38
2018-04 40
2019-01 51
2019-06 60

YYYY-MM Spotify Subscribers (Million)
2008-10 0
2012-07 4
2013-03 6
2014-05 10
2015-01 18
2015-04 22
2015-07 24
2015-10 28
2016-01 30
2016-04 36
2016-07 40
2016-10 48
2017-01 52
2017-04 59
2017-07 62
2017-10 71
2018-01 75
2018-07 83
2018-11 87
2019-02 96
2019-04 100
2019-06 108
2019-10 113

 

[LeeW]

Apple hasn't released their numbers since the last summer

Whenever Apple stop releasing numbers on something I usually take the view it is because the message is not as positive as they want you to believe. That said, in terms of potential Spotify is always going to have the edge, Apple Music appeals to users of apple devices more than anyone else, Spotify has the potential appeal to the entire audience.

Whichever way you look at it, all the matters is what you prefer, neither service is going anywhere.