Tim Cook reveals Apple Music at 6.5M paid users, talks privacy, more at WSJD Live

Posted:
in General Discussion edited October 2015
On stage at the second annual WSJD Live conference on Monday, Apple CEO Tim Cook revealed Apple Music now has more than 15 million users, including 6.5 million in the paid tier, but stayed mum on Apple Watch sales numbers and a rumored car project.


Source: The Verge


The interview started out slow with Wall Street Journal editor Gerard Baker trying to pry some Apple Watch data out of Cook, who has been expectedly tight-lipped about sales performance and plans for next-generation hardware.

Cook did answer a question pertaining to Apple Music, however, saying the fledgling streaming service now has 6.5 million paying subscribers and another 8.5 million trying it out for free. As noted by The Verge, Cook once again touted Music's human curation features and ability to surface new and interesting tunes on a per-user basis.

"It's going really well," Cook said. "Fortunately, lots of people are liking it."

Cook carefully talked around Apple Car rumors, saying that with the incorporation of more powerful software like autonomous driving and electric propulsion, the automotive industry is in for "massive change." Still, Cook was not prepared to offer insight into Apple's supposed plans.

"As we look at it, what we really want in the hopefully in the short term is, we'd like people as they enter their car to have an iPhone experience in their car," he said.

Regarding iPhone, Cook said Apple's new iPhone Upgrade Plan is designed for owners who want to update their smartphone every year, and should not be considered an attempt to undermine partner carrier sales. Under the plan, customers pay Apple monthly fee -- starting at $32 per month for carrier unlocked versions -- to receive a new iPhone with AppleCare+ each year, after trading in their old handset.

Cook again reiterated that data privacy is a huge concern for his company, saying, "We think encryption is a must in today's world. No back door is a must." The statement is in response to overtures from the U.S. government to create a backdoor policy that would allow sanctioned law enforcement bodies access to sensitive user data stored on Apple's servers. Cook has long been a staunch opponent of such practices, including customer tracking programs other tech companies use to deliver personalized services and advertisements.

On social responsibility, Cook is adamant that Apple should leave the world a better place than they found it. To Apple, this includes diversifying the workplace, bolstering the nation's education system and decreasing impact on the environment.

"Steve [Jobs] formed Apple to change the world," he said. "This was his vision. He wanted to give technology down to everyone and empower everyone to use it. He wanted to take it out of the glass house, the corporations, the rich people that had the technology. [...] That is still our drive."

Baker followed up by asking if that line of thinking alienates Apple's current clientele.

"If we piss a few people off, at least they'll say, 'They made a great product, and I may not agree with this or that, but I respect that they're trying to leave the world better than they found it.' At least, that's what I hope they'll say," Cook said.

It was reported that Cook planned to fly to Beijing after the interview, where Apple plans to have 40 Apple Stores in operation by the end of 2015. Currently, the region accounts for roughly 20 percent of Apple's bottom line.

This is Cook's second appearance at WSJD live. During last year's inaugural conference he explained why Apple could no longer manufacture iPod classic, revealed Apple Watch battery life expectations and addressed concerns regarding Apple Pay adoption.
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Comments

  • Reply 1 of 41
    Headline says 6.5 million and the article 8.5. Which is it?
  • Reply 2 of 41
    realisticrealistic Posts: 1,154member
    self deleted...
  • Reply 3 of 41

    So 6.5 million is roughly 1/4th Spotify's paid numbers. And record execs apparently expect 15 million paying AM subs by the end of the year (link: http://www.rollingstone.com/music/news/apple-spotify-streaming-war-heats-up-20151016?page=2 ), which I doubt will happen.

  • Reply 4 of 41
    rogifanrogifan Posts: 10,669member
    So 6.5 million is roughly 1/4th Spotify's paid numbers. And record execs apparently expect 15 million paying AM subs by the end of the year (link: http://www.rollingstone.com/music/news/apple-spotify-streaming-war-heats-up-20151016?page=2 ), which I doubt will happen.

    They really need to fix the product to get more subscribers. But that would involve blowing up iTunes and considering they just bolted Apple Music on to an already bloated iTunes I have my doubts that's in the plans.
  • Reply 5 of 41
    Quote:

    Originally Posted by Rogifan View Post





    They really need to fix the product to get more subscribers. But that would involve blowing up iTunes and considering they just bolted Apple Music on to an already bloated iTunes I have my doubts that's in the plans.

     

    Unfortunately Windows is the problem; Apple's not going to produce iBooks.app, Music.app, Movies.app, Podcasts.app, etc for Windows, so we get the mess that is iTunes.

     

    But even with all that stuff stripped out in iOS, the Music app is still a mess.

     

    AM is starting to feel like a 'damned if you do, damned if you don't' situation. If they'd focused on user experience by making it a separate app, then it's not integrated with your iTunes library (and then the question becomes, 'why does this exist'?). But by integrating it with your iTunes library they turned the UI into a mess and buried things in submenus galore.

     

    They really should have just not bothered and left it to third parties.

  • Reply 6 of 41
    rogifanrogifan Posts: 10,669member
    Unfortunately Windows is the problem; Apple's not going to produce iBooks.app, Music.app, Movies.app, Podcasts.app, etc for Windows, so we get the mess that is iTunes.

    But even with all that stuff stripped out in iOS, the Music app is still a mess.

    AM is starting to feel like a 'damned if you do, damned if you don't' situation. If they'd focused on user experience by making it a separate app, then it's not integrated with your iTunes library (and then the question becomes, 'why does this exist'?). But by integrating it with your iTunes library they turned the UI into a mess and buried things in submenus galore.

    They really should have just not bothered and left it to third parties.

    Ben Thompson said something similar a few months ago on his blog Stratechery. Basically he argued that Apple didn't have to get into streaming music. I'm not sure I agree but I do think Apple should have focused on something simple instead of trying to boil the ocean. No Connect, No Beats 1, just a really good streaming music service with a simple intuitive interface. That's not what we have now.
  • Reply 7 of 41
    2oh12oh1 Posts: 503member
    Quote:
    Originally Posted by Rogifan View Post





    They really need to fix the product to get more subscribers.



    Exactly this.

     

    I tried Apple Music and I really liked it, but I quit when my free trial ended because I was having trouble with it.  I'll probably sign up in a few months because I suspect the issues I experienced will get worked out soon(ish).

  • Reply 8 of 41
    slurpyslurpy Posts: 5,317member
    Quote:

    Originally Posted by Rogifan View Post





    Ben Thompson said something similar a few months ago on his blog Stratechery. Basically he argued that Apple didn't have to get into streaming music. I'm not sure I agree but I do think Apple should have focused on something simple instead of trying to boil the ocean. No Connect, No Beats 1, just a really good streaming music service with a simple intuitive interface. That's not what we have now.

     

    Uh, Apple Music works perfectly for me, and I have difficulty imagining a more intuitive interface. I mean really, how long does it take to figure it out? A few min? I really don't get all the bitching. I also don't get why literally all your posts consist of you quoting people on podcasts or blogs, as if these opinions are somehow some kind of definitive evidence towards something, instead of the noise it's always been. 

  • Reply 9 of 41
    rayzrayz Posts: 814member
    So 6.5 million is roughly 1/4th Spotify's paid numbers. And record execs apparently expect 15 million paying AM subs by the end of the year (link: http://www.rollingstone.com/music/news/apple-spotify-streaming-war-heats-up-20151016?page=2 ), which I doubt will happen.

    How long has Spotify been running?
  • Reply 10 of 41
    levilevi Posts: 344member
    That's a pretty strong conversion rate.
  • Reply 11 of 41
    calicali Posts: 3,494member
    Not to be pessimistic but how many of these are people who forgot to untick the "automatic renewal" option?
    slurpy wrote: »
    Uh, Apple Music works perfectly for me, and I have difficulty imagining a more intuitive interface. I mean really, how long does it take to figure it out? A few min? I really don't get all the bitching. I also don't get why literally all your posts consist of you quoting people on podcasts or blogs, as if these opinions are somehow some kind of definitive evidence towards something, instead of the noise it's always been. 

    I like how Rogifan always quotes Podcasters and "journalists" and how you always point it out.

    It's cute on both ends. Sorry.
  • Reply 12 of 41
    levilevi Posts: 344member
    hexclock wrote: »
    Headline says 6.5 million and the article 8.5. Which is it?

    6.5 M paid users, 8.5 M free users.
  • Reply 13 of 41
    So 6.5 million is roughly 1/4th Spotify's paid numbers. And record execs apparently expect 15 million paying AM subs by the end of the year (link: http://www.rollingstone.com/music/news/apple-spotify-streaming-war-heats-up-20151016?page=2 ), which I doubt will happen.

    Shall I wake my daughter to correct your math? Spotify has 20 million paid subscribers. 6.5 million represents 32.5%, which is almost 1/3, and a hell of a lot better than the 1/4 you mentioned.

    And this is just over 3 months. Spotify better be worried. Then again, maybe not. I'm sure there are enough Apple haters to keep them going. Outside of that, I can't think of any reason why I'd choose Spotify over Apple Music. I can think of several why I'd choose Apple Music over Spotify.
  • Reply 14 of 41
    solipsismysolipsismy Posts: 5,099member
    Did Spotify [I]et al.[/I] lose customers in order for Apple to gain 6.5 million paid subscribers within a month(?) after the free trails ended, or are these subscribers mostly new to streaming music?
  • Reply 15 of 41
    Yes. One here, at least.
    And quite happy I did. Apple music is fantastic.
  • Reply 16 of 41
    Apple Music and the new iPhones are making the rounds in Asia. The market is opening up for Apple Music. We discussed in a year that Spotify will be a minority player. 9 more months to go.
  • Reply 17 of 41
    What people don't seem to realize is that Apple Music now has $1 BILLION a year in revenue for its first year.

    iTunes Music Downloads are about $3 BILLION a year in revenue. This means that in its first year, Apple Music has achieve 33% of iTunes Music Revenue.

    Note that Global Music Sales are $15 Billion a Year. So the combination of iTunes Music Sales and Apple Music is more than 26% of the revenue for the ENTIRE Music Industry.

    That is AMAZING.

    And APPLE MUSIC IS GROWING.
  • Reply 18 of 41
    rayz wrote: »
    How long has Spotify been running?

    Spotify was founded in 2006... and launched in 2008. So that's 7 years of actual operation. The question is... how much longer will they be around?

    I read somewhere that Spotify made $1.2 billion in 2014.

    BUT... they spent $1.4 billion in music licensing rights in 2014. And the more customers they get... the more it costs them because they have to pay for more licensing rights.

    It's not scaling very well.

    I think the free customers are killing them. But Spotify needs the exposure that the free tier gives them. The trick is to convert free customers into paying customers. I'm sure Spotify has done the math on how many paid vs free customers they need to survive. But even after 7 years... they're still relying on venture capital money like a startup.

    And that was before Apple launched their own music service.

    I wish Apple would just include an Apple Music subscription with every iOS device. They can certainly afford it. It could be a loss-leader to sell devices. Of course that won't happen... but it would be nice.

    But here's the scary part for anyone who is not Apple:

    Apple's streaming music service is a side-business. They could operate it at a loss and they wouldn't even feel it.

    But Spotify's ENTIRE business is streaming music. If they operate at a loss... it's devastating.
  • Reply 19 of 41
    Quote:

    Originally Posted by TheWhiteFalcon View Post

     

    So 6.5 million is roughly 1/4th Spotify's paid numbers. And record execs apparently expect 15 million paying AM subs by the end of the year (link: http://www.rollingstone.com/music/news/apple-spotify-streaming-war-heats-up-20151016?page=2 ), which I doubt will happen.




    Those 6.5 MILLION Apple Music customers represent 6.5 Million customers who won't be on Spotify.  So obviously, Apple Music will limit Spotify's growth.  That is the effect of competition.

     

    And those 6.5 MILLION Apple Music customers represent $1 BILLION in new revenue for Apple.  This is equal to 1/3rd iTunes Music revenue - in only its first year.

     

    Since Apple is in this venture for life, it can grow this business.

     

    The Global Music Business is about $15 BILLION a year.  And Apple Music Plus iTunes Music represent 26% of this revenue ($4 BILLION + in revenue).

     

    So if Apple EVENTUALLY can grow Apple Music to 20 million users, it will take HALF of the Global Music Business.

  • Reply 20 of 41
    Quote:

    Originally Posted by Rogifan View Post





    They really need to fix the product to get more subscribers. But that would involve blowing up iTunes and considering they just bolted Apple Music on to an already bloated iTunes I have my doubts that's in the plans.



    I like iTunes. I like having everything under one roof.  Of course iBooks was separated out.

     

    But the primary purpose of iTunes is to synchronize to your iOS device.  And it would be a stringy mess if you have separate apps to do that.

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