“Apple’s ability to promote its own services like Apple Music, iCloud, and Apple Pay represents a meaningful competitive advantage,” Gene Munster and Will Thompson write for Loup Ventures. “We looked at the three major music streaming services (Spotify, Apple Music, and Pandora) to quantify how iOS ownership impacts paid subscribers and market share.”
“We estimate Apple Music has 21m North American subs vs. Spotify at 20m,” Munster and Thompson write. “Adjusting for addressable market (we estimate that 95%+ of Apple Music subscribers are on iOS), Apple is converting potential customers into paying customers at a rate 2.5x faster than Spotify.”
“Spotify still controls the global paying music streaming market with about 62% share, down slightly from 65% in Sep-17. Apple has grown to 34% from 30% in Sep-17. Pandora has lost share from 6% to 4%,” Munster and Thompson write. “Apple Music has room to grow with just 45m subs out of 780m active iPhone users (6%) paying for the service.”
Read more in the full article here.
MacDailyNews Take: The higher the quality of the customer base, the higher potential for recurring revenue.
Offering premium products allows Apple to attract premium customer willing to pay premium prices which allows for more R&D and more innovation, which accelerates the process.
It’s why market (unit) share isn’t a game Apple bothers playing. It’s also why Apple Music has already passed Spotify in paying customers in North America and Japan and will pass Spotify worldwide eventually. It’s only a matter of time.
There’s always a large junk part of the market. We’re not in the junk business… There’s a segment of the market that really wants a product that does a lot for them, and I want to compete like crazy for those customers. I’m not going to lose sleep over that other market, because it’s just not who we are. – Apple CEO Tim Cook, September 2013
Apple’s market share is bigger than BMW’s or Mercedes’s or Porsche’s in the automotive market. What’s wrong with being BMW or Mercedes? – Steve Jobs, 2004
Why Apple Music surpassed Spotify in the U.S. – July 12, 2018
Apple slices into Spotify’s lead in U.S. music market – July 9, 2018
Apple Music now has more paying subscribers in the U.S. than Spotify – July 6, 2018
Apple revs up their own music publishing business – June 14, 2018
Oliver Schusser named new Apple Music chief as service passes 40 million subscribers – April 11, 2018
Apple Music hits 40 million paid subscribers milestone – April 4, 2018
Apple Music hits 38 million paid subscribers – March 12, 2018
Apple Music expands student membership pricing to 82 new countries – February 13, 2018
Apple Music poised to knock off Spotify – February 12, 2018
Apple Music was always going to win – February 6, 2018
Apple Music on track to overtake Spotify, become No. 1 streaming service in U.S. this summer – February 4, 2018
Apple Music and Spotify now account for the majority of music consumption in the UK – January 3, 2018
Spotify files for its IPO – January 3, 2018
Spotify hit with $1.6 billion lawsuit from music publisher – January 2, 2018
Apple Music passes Pandora and Spotify in mobile usage – March 29, 2017
Spotify hits 50 million paid subscribers – March 3, 2017
Apple Music surpasses 20 million paid members 17 months after launch – December 6, 2016
Oh ok, Spotify listeners are upgrading to Apple Music – July 19, 2015
Spotify CEO claims to be ‘ok’ with Apple Music – June 9, 2015