A well-known music industry analyst is estimating that Apple Music will hit 8M paid subscribers by the end of the year, and will reach 20M by the end of 2016, reports Music Business Worldwide. The prediction was made by Mark Mulligan, co-founder of digital content specialists Midia Consulting, who previously held senior research positions with Forrester and Jupiter.
In raw numbers terms, that would put it just behind market leader Spotify by the end of next year, but that may not quite present the true picture …
Spotify’s ‘paid subscribers’ currently include those on its three-month trial of Spotify Premium, which costs just $1/month. Its true numbers are thus likely to be significantly lower.
“The wildcards in the equation are whether Apple can do a better job of pushing users from iTunes Radio to Apple Music and what happens when Spotify restates its subscriber number to reflect the impact of $1 a month 3 month trials,” writes Mulligan.
Apple revealed in October that it had 6.5M paying subscribers, a take-up rate Mulligan described as ‘astounding.’ As I mentioned at the time, however, there is also an unknown in Apple’s numbers: how many of those are free trialists who simply forgot to cancel before the first payment was taken? Apple may also have further muddied the waters by gifting paid subscriptions to retail employees (though these won’t move the dial much).
Apple reportedly tried hard to negotiate deals with labels that would have allowed it to charge less than $10/month for the service, but labels resisted. Mulligan believes that Apple hasn’t necessarily given up on this aim.
If Apple finds growth tough going, expect it to throw everything it has got at getting the labels to agree to lower price point products so it can open up large chunks of the iTunes music customer base.
If the 8M figure turns out to be correct, Apple will have acquired twice as many subscribers in six months as Spotify achieved in its first four years.
The service got a new group of potential subscribers this week when Sonos rolled out support for the service, albeit in beta form for now.
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If Apple manages to convince the music labels that Apple Music should be less than $10 a month it could mean Spotify, Tidal and others will have to close up shop as I doubt their already non-profitable business strategies could sustain such a hit.
A lower AM price compounded with popular artists keeping their songs off of Spotify (Adele, Taylor Swift) as well as Apple exclusives will only add insult to injury.
From there Apple could slowly increase the price back to $10 over the next few years or offer a $10 package that includes more features, freebies like exclusive tracks/videos, App Store giveaways (apps, movies, TV shows), free/deeply discounted concert tickets, or early access to albums.
Either way a lower Apple Music price should scare the crap out of Spotify.
Do the subscriber statistics include all family members using the service – we have five people on our family account…
No, I can’t imagine Apple doing anything sketchy like that – will be the actual subscribers.
I’m not sure how that would be sketchy. Sure, 5 people for $15 is less money than 5 people paying $10 each but they are still subscribers using an authorized subscription. If anything I would imagine they would count them as subscribers but surely be tracking family subscribers and individual subscribers separately.
The person who pays the bill is the paying subscriber; their family members aren’t.
I think that is a bit of a semantic argument. Someone paying $15 is paying for (up to) 6 users.
You have more experience here so maybe the standard way of reporting this is to only count the number of people paying rather than how many people they are paying for.
I would say that normal terminology is that the person paying the bills is the subscriber. I’d feel very confident Apple isn’t counting any additional family members as subscribers.
I live outside US and the 9$ for family plan is a win!, got 5 people in here. I just wish they made the app interface more simple, I did have some little problems at the start but my father and mother still find confusing when using the app.
Is there a way that I can gift an Apple Music subscription to someone for Christmas? They already have an iTunes account.
Apple sales Apple Musoc gift cards now. The cards have ugly graphics.
http://www.apple.com/shop/personalize/itunes?mco=MTM3NDc0MTQ&product=ITUNES_GIFT_CARDS-101703
I mean, Apple music is just freaking expensive in UK, 10GBP. No student discount which is stupid because a lot of students have iPhones, and when I used it for trial, it messed up my iTunes Library so.. Unless the prices are lowered and problems fixed, I am staying with Spotify.
The record companies set the prices. Apple prefers a lower price for Apple a music.
It’s funny how many people bitch about the pricing of Apple Music. I for one used to drop $40 a week on CDs’s. I wish Apple Music was around 8 years ago I would saved $150 a month.
I never spent that much although I love music too and spend a lot of money on music. That is ultimately why I left Apple Music: I already had about 2,200 tracks in my iTunes Match library and then with Apple Music I hit the then limit of 25,000 tracks. There’s something that rubs me wrong about having two separate paid services feeding the same arbitrary limit. (I say arbitrary because songs purchased directly from iTunes don’t count against that limit and I’ve bought plenty from there meaning that my total library count is higher than 25,000 without any recognizable issues.) It feels like double dipping to me and I spent enough time with Amazon Music to get comfortable there before Apple got around to raising their limit.
If I sound bitter I am; I spend a lot of money with Apple and this kind of limit without communication regarding progress to their stated goal is not something I have the patience for.
I’m curious the country or region breakdown of paid subscribers. Apple and the record labels have priced Apple
Music aggressive in countries like Russia at $3 a month where they have a high number of illegal music and movies downloads.
I think the 20 million would be easy attainable if Apple got the $7 a month pricing in the US they wanted. People need to remember Apple has to deal with record labels country by country and Apple wants the cost lower then the the labels want. This is why we don’t have Apple TV service because Apple wants cheaper smaller bundles then companies like Disney wants. Apple wants $20-$30 service close to what Sling TV has. Disney wants Apple to take all the Disney channels, ESPN networks and the AbC networks.
It’s the Miracle on 1 Infinite Loop! 250% growth in a saturated market sector in one year? Someone call Jesus and tell him there’s another miracle worker on the scene.