According to the Financial Times, Apple has passed 10 million paying subscribers for Apple Music. Apple Music launched in June 2015 with a three month free trial. Since the launch, Apple announced it has 6.5 million paying subscribers in October. In November, Apple launched Apple Music on Android which no doubt attracted a significant chunk of additional new users.
Crossing ten million is a significant symbolic milestone, as it now means Apple Music is half as large as Spotify’s paid userbase.
The growth of Apple Music relative to Spotify is impressive; it took six years for Spotify to report 10 million paid subscribers. Apple Music has achieved that number in a little of six months. However, it is important to remember that much of Spotify’s business is derived from free users as most customers use the free ad-supported version.
Apple has relied on numerous exclusives with artists to push its streaming music service to customers. Most recently, in December, Apple offered Taylor Swift’s 1989 World Tour video as a free perk for Apple Music members.
FTC: We use income earning auto affiliate links. More.
It also means Apple Music is not the failure many in the press were rooting for it to become.
We really need to start ignoring that crowd. Remember they comment here too.
I totally agree with you….As usual people believed it was doomed to failure…
It hasn’t proven to be a profitable business model. NO one is making a profit with streaming music. I don’t know how long Apple will run it if it’s not profitable. They can afford to keep it going for so long. Typically 3 to 5 years to see if it’s profitable is what they probably are going to look at. Just a guess, but I know it’s not profitable at 10 million subscribers.
iTunes ran with little to no profit for over a decade. iTunes, App Store and Apple Music is more to help sell devices the. Provide a big revenue stream.
@Rich, so you don’t really know why, but you think it’s unprofitable, because, well, because…
I hate to say it, but at 10 Million subscribers, it’s still not profitable yet. Spotify loses money at 20 Million paid subscribers and every year, Spotify has lost MORE money even when they get MORE subscribers. I don’t think Apple has a profitable business yet and with them paying these DJ’s and Artist’s a lot of money to curate, it costs Apple quit a bit more than Spotify to run their streaming business model.. Time will tell if they can manage to make a profit from this but at 10 Million, my guess is they are still losing money on it.
Apple is so profitable in other areas that making money from Music is likely not even on their balance sheet. I’d imagine Music falls under the loss leader column and they just keep moving on.
Apple’s plummeting stock price notwithstanding the company has multiple sources of revenue versus Spotify who has nothing but music and likely lacks the ability to invest in R&D to produce anything other than a better app.
Maybe if Spotify made headphones or got into the music business by producing artists they’d have something other than a mobile app business but with all of their eggs in one basket it’s Spotify that should be worried about their profitless business, not Apple.
I wonder though: is Spotify profitable if you exclude the “free” streaming crowd? i.e., does the infrastructure and licensing payments associated with the 20 million subscribers add up to more or less than the subscribers are paying in?
It’s my understanding that it’s the “ad-supported” (free) users that are a drain on the system (i.e. the ads don’t cover the licensing costs).
It is completely possible that Apple is already profitable at 10 Million subscribers… because they ONLY have paid subscribers. As long as their licensing costs per-play work out to less than those subscribers are paying… then they’re going to be profitable.
The difference is Apple make a boat load of money because they don’t waste money on things which aren’t profitable. If Music ends up making them no money then they WILL pull the plug.
Like every well run business would.
“paying these DJ’s and Artist’s a lot of money to curate”
I cannot trust anything that you have said. Anyone/everyone who uses apostrophes when pluralizing nouns is stupid.
Apple could lose money on Apple Music for the rest of our lives because they make so much money in other areas. It might be a loss-leader to help sell iPhones and Macs. Apple Music is just one (small) part of Apple.
Spotify doesn’t have that luxury. Streaming music IS Spotify’s business. You’re right… Spotify loses money even when they add more customers. The free tier is killing them.
Apple Music will likely be around in 5 years. The same can’t be said for Spotify.
Maybe Spotify could trim the fat and get rid of the free tier. But they can’t keep relying on venture capital. At some point that money will dry up.
Let’s think ab’t the MacApp store, okay?
And I would assume most of those subscribers are coming from other services like Spotify and not completely new subscribers.
And that would be a mostly false assumption. I’d be surprised if the majority came from Spotify. I’d be willing to bet money that the majority are new users who weren’t on streaming services before.
I suspect Wolf is right. Either way the 10M number is huge. This is a growing market. Any switchers at this point is just icing on the cake.
I used Deezer for a lot of time, once it was the first streaming service available in Brazil, but then changed to Apple Music and I have to say I’m pretty happy with it.
I wonder if Apple is reporting only paying accounts or including all individuals that are in a Family Plan… At the same time, I don’t believe for a second that Spotify has close to 20 million paying customers.
Apple isn’t reporting anything. This is a rumor they refused to comment on.
I used to use Spotify, but when Apple Music came out, I immediately signed up for it because of integration into iOS and Siri. 6 months later, it’s still my daily driver for music (except for Adele’s 25, I bought that on CD and imported it into Apple Music).
The big question is… who is on the flip side of this?… and by ‘on the flip side’… I mean the independent artists who need to know how to sell music on iTunes and Apple Music. Right now, all I know of is ADED.US Music Distribution –– They seem to be the best music distribution company and I know that they can distribute your music to iTunes, Apple Music, Spotify, Amazon, Google Play, and 1,000 other stores. I can state that Apple Music pays more in royalties than Spotify… something like $0.002 per stream
TuneCore. CDbaby. All the standard independent channels support Apple Music
The numbers are impressive and whether its making money for Apple or not but making a good app and easy to stream music app will just keep customers locked into it and in keep an iOS device
I would like to see a global breakdown of paid subscribers. Curious now it is doing in a place like Russia with extremely high privacy, but Apple Music is about $3 a month.
Apple is available in 111 countries while Spotify is in 58. Having nearly double the number of markets Apple Music should be outpacing Spotify. I think Apple price varies much more across the globe then Spotify.
How many without the millions of Australian customers with 2 years Apple Music included for free with their Telstra account?
I finally subscribed to Apple Music as a family plan with my wife and I have to say that it is a better experience than Spotify. It is starting to really curate much better suggestions and mixes than Spotify has. I also should point out that Spotify is trying to bump its numbers by offering a ton of incentives. .99 for first 3 months of premium, or $3.99/mo for first 6 months, etc… Sure these are paying customers, but Apple has never done this other than the free trial.
That’s an impressive mark. Very cool.
A cash hemorrhage is one thing, but I doubt profitability for Apple Music is actually that crucial. It’s a paid subscription web service designed to add value, stickiness, brand awareness, and cultural cache to Apple. It doesn’t need to be independently profitable any more than iCloud storage or the previously paid OS X upgrades.