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Apple announced on December 7 that it passed the milestones of 20 million paying subscribers 17 months after launching. This number reinforces Apple music’s position as the second most important player in the music streaming market. What does that mean for Spotify? The music streaming market? The overall music industry?

On September, Daniel El, the CEO of Spotify announced that it has achieved 40 million paying subscriber (twice as much as Apple music) and Music Business Worldwide expects that figure to reach 50 million by February 2017. The number of Spotify subscriber is likely to increase even more than forecasted after the price promotion announced recently.

Despite the big difference in the number of subscriber between the two streaming services they acquired a very similar number of users in 2016. 12 million for Spotify and 10m for Apple music.

Apple music growth is without a doubt faster for now as it took seven years for Spotify to reach 20 million subscribers while it took 17 month to Apple music. Spotify counter argument is that they their are pioneer in the music streaming market and played an important role in making this market what it is today. Also, Spotify did not sell over a billion IPhone with their streaming service already installed which is an extremely valuable advantage Apple music has.

In the graph above, we notice that Apple music’s curve representing the number of users over time is much steeper than the one of Spotify but the difference between the two remains important.

In any case, overall, the fact that both service together have over 60 streaming subscribers is very positive for the future of the music industry. In 2014 the number of people paying for streamed music was of 41 million across all streaming platforms. This can be reflected on Warner’s revenues this year of $3.5bn in the 12 month to end of September, the biggest revenues in 8 year and streaming is more than ever before established as its largest revenue source.

Sources: http://www.musicbusinessworldwide.com/streaming-drives-warners-biggest-annual-revenues-in-8-years/

http://www.musicbusinessworldwide.com/apple-music-surpasses-20m-paying-subscribers-17-months-launch/


Comments

2
  • Angela Gil

    Right! Apple also started at a different level, whereas Spotify had to start from scratch. Pretty impressive still, considering it is actually paying customers! Would this put more and more pressure on Spotify to remove its free tier?

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    • phurel1

      phurel1 phurel1

      Reply Author

      Thank you for your comment!!
      Yes, hopefully! But for now it seems that the only thing that really maters to streaming services is to capture at any cost users before their competitor does. In the longer run, the free tier should disappear so the industry can benefit even more from this way of consuming music or at least to reduce always more and more.

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