It Took Six Years For Spotify to Get 10 Million Subscribers but it Only Took 6 Months for Apple Inc. (AAPL)

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Apple Inc. (NASDAQ: AAPL) has received over 10 million customers since its launch in June last year. Spotify, who are the leaders in this industry, took about six years to achieve this. Apple has undoubtedly enjoyed a fast growth in the number of subscribers, and one of the main reasons behind this is the three-month free trial.

It is also worthy to note that Apple didn’t have to deal with lots of lengthy negotiations with major labels to join the US market though it had some nagging issue during its launch. Their enormous marketing power and a large customer basis also played a critical role in their fast growth.

Apple currently has over 10 million paid subscribers in over 100-plus countries where their service is available. This means Apple has about half as many subscribers as Spotify, who closed the 20 million premium subscriber in June.

Spotify has yet to update this figure since then though the company’s head of PR, Jonathan Prince noted that the last half of 2015 saw the highest number of subscriber growth in Spotify’s history. He also stated that Spotify customers grew by over 5 million subscribers in the first months of 2015. This would mean that currently Spotify has over 25 million subscribers.

It is good news that Apple is making streaming work though analyst suggests that an increase in streaming will ultimately result in reduced downloads. For instance in the US, the total sale of the album fell by about 9%, and Sale of the individual track also declined by about 12% during 2014. This period had about a 50% increase in demand for streaming and about 164 songs were streamed.

Mark Mulligan predicts that Apple will achieve over 20 million total users by the end of 2016. With this pace, Apple could soon be the largest streaming music service in 2017 if Spotify maintains its current growth rate.

Both Spotify and Apple music usually cost $ 9.99 per month though Apple Inc. (NASDAQ:AAPL)’s iOS subscribers who subscribe for Spotify through iTunes have to pay $12.99 monthly to cover the controversial cut of App store proceeds.

Sources: Macrumors, TheVerge

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Ruchi Gupta
Ruchi has more than 6 years of rich experience ranging from Financial Services to Media. She has worked with companies like Zacks, ABN AMRO Bank (now RBS) and Genpact India. Gupta completed her Post-Graduate Diploma in Business Administration with a specialization in Finance from International School of Business and Media (ISB&M). Ruchi can be contacted at: [email protected]

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1 COMMENT

  1. This analysis is inside out.

    What it ignores is that Apple has long been the worlds largest music retailer.

    Subscription based streaming was eating into music sales so Apple needed a subscription based streaming option.

    In particular, Apple needed to ensure that those who bought music from Apple, but were attracted by subscription based streaming, bought this from Apple.

    Remember, Apple cares to maintain its total music customer count, not specifically the streaming count.

    So, the success criteria is not how many streaming customers Apple have, compared to Spotify, but did the facility stop the leak, and maybe even start the reversal.

    So, Spotify captures music customers from iDevice and Android users.

    Apple currently only captures music customers from iDevice users. A much smaller market. Apple would only need to have captured that percentage of the new subscription streaming users, to have stemmed the leak. And clearly Apple is well beyond that target.

    Where the situation becomes more directly competitive is when Apple launches Apple Music, subscription streaming and sales, on Android devices.

    That’s when we see significant growth potential for Apple’s overall music (small ‘m’) market.

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