Bary writes, “And while streaming seems to be offsetting much of the revenue lost to disappearing CD sales, it’s still not clear that it’s good business.”
“One notable media executive had some harsh words for streaming music services during a speech at a Deutsche Bank investor conference on Monday,” Bary writes. “‘We think it’s a very unattractive business,’ said Liberty Media CEO Greg Maffei, noting the high cost of music rights. ‘You’ve seen that with Spotify now with 50 million users [and] still not profitable.'”
Read more in the full article here.
MacDailyNews Take: Far be it for us to absolve certain Apple executives (Eddy Cue for example) by rewarding failure (that’s Cook’s job, it seems, as Cue still has one), but Apple Music hasn’t been around nearly as long as Spotify. Yes, it’s getting momentarily outgrown and that’s a worrisome sign of Apple Music’s piss-poor management that can’t even convert the richest demographic by far into $9.99/month subscribers faster than Spotify can convert a bunch of coupon-clipping Fragmandroid-settling cheapskates into paying customers, but that’s likely just temporary (assuming Apple someday finally gets their shit together on this).
And, no, Planet of the Fscking Apps isn’t the answer to selling more Apple Music subscriptions, geniuses.
Still, that said, as we wrote in February 2016, “Apple Music launched in over 100 countries. That’s an average of fewer than 110,000 subscribers per country since last June. Maybe there just aren’t that many true music lovers out there? It seems like most people are happy enough to be music dabblers for the price of free, even among well-heeled Apple users.”
Even if Apple bought Spotify this afternoon and combined their 50 million with Apple Music’s 20 million, they’d only have 70 million subscribers. And, remember, they’re not all paying $9.99. Both Spotify and Apple Music have $4.99/mo. plans for “students” (wink, wink). Even if they were all paying $9.99 on average, that’s gross revenue of $699.3 million/month. That’s not pocket change (but it’s not a lot of money for Apple either, which reported revenue of $78.4 billion last quarter) and that’s before paying out the music royalties, the costs of running and marketing the service, the costs of producing brain-dead rip-offs of Shark Tank and The Voice (focused on apps, no less), paying Eddy Cue $22.8+ million a year to not get content deals for Apple TV, paying Jimmy Iovine only-God-knows-what to bullshit you to death 24/7, etc., etc., etc.
Obviously, Apple feels they need to continue to have a major presence in music. It keeps the brand young. It helps to sell iPhones, etc., but streaming music just isn’t a huge money-maker. Maybe if it morphed into a streaming content play it’d be a better business, but, of course, it’s named “Apple Music,” (even though it has videos, video interviews, and is soon adding “TV shows”), so, to make more sense to prospective subscribers, it’d have to be renamed, re-marketed, etc. For now, Apple’s just in it because they feel they have to be in it, not to make money.
Spotify hits 50 million paid subscribers – March 3, 2017
Eddy Cue: ‘Planet of the Apps’ is another way to sell more Apple Music subscriptions – February 14, 2017
Apple Music still trails Spotify’s growth rate – December 19, 2016
Apple Music surpasses 20 million paid members 17 months after launch – December 6, 2016
Apple offers students half-price $4.99 Apple Music subscriptions starting today – May 6, 2016
[Thanks to MacDailyNews Reader “Tom R.” for the heads up.]