I think the question isn’t as much can Spotify survive against Apple Music but can Spotify survive at all. I don’t think they are even direct competitors (in a sense that Spotify users are unlikely to migrate to Apple Music and vice versa). 

Spotify has a strong and loyal following of users who are not likely to abandon ship for Apple Music unless the Apple Music exclusives are something they must have. 

The problem with Spotify is that they are facing significant headwinds in the industry. They make no profit and their growth has slowed significantly. Their costs are rising and their free service, where most of their users are, is not going to be around forever, mainly because it makes no money for the company or the studios; it’s a loss-leader that is supposed to get people to pay for the service. Eventually they are going to be pressured into shutting it down or changing it significantly with stricter limitations and more ads. Growth and profitably are going to be harder and harder to get as the studios demand more money, the landscape becomes more competitive, and new users harder to lure over.

Spotify has 20 million paid accounts. That number needs to go up significantly. Spotify needs to start convincing more of it’s free users to upgrade. They need to make their free product worse (remove features and add ads) and push their paid product stronger. Spotify would gladly sacrifice all of their free customers if 10% of them upgraded. That said, those 20 million paid users aren’t going anywhere. They see a value in Spotify and they aren’t likely to stop. I think it’s likely that Spotify will be acquired by a company like Amazon, FaceBook, or Google that doesn’t mind subsidizing the service. 

Apple has an enormous competitive advantage that is impossible to overlook: 800+ million iTunes accounts and over 1 billion iOS users. Apple Music isn’t going to steal users from Spotify, it’s going to bring music streaming to the people who have never used a streaming service before. Apple already signed up more than 15 million people since launch and that number is only going to skyrocket over the next year. Apple can ignore Spotify and win. It’s not a zero sum game. 

Bugs and features are basically irrelevant in this discussion of the success of Apple Music and Spotify. The bugs will be worked out and the features will be added. The question of success or failure of the product depends on the business side of things. I think both music services have a long road ahead of them to success. The problem with Spotify is that that road has a lot more obstacles and they might not come out an independent company.

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