Apple Music rival Spotify tops 100 million subscribers, 30 million paid listeners

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Spotify on Monday announced that it had surpassed 100 million subscribers, including 30 million paid customers, keeping it firmly ahead of Apple Music and other rivals in the streaming music space.




Sweden's Spotify last reported 75 million listeners in total, Reuters said. The service offers two subscription tiers: a free ad-supported one, and a Premium option that strips out ads while enabling offline listening.

Apple by contrast recently announced that it had reached 15 million subscribers. Apple Music is a pay-only service beyond a three-month free trial.

Spotify has yet to turn a profit, though, as it pays out more than 80 percent of its revenue to labels and artists, and for the moment it's focused on international growth. It's unknown whether Apple Music is directly profitable, but regardless the service is mainly a way for Apple to keep people attached to its platforms.

Thanks to integration into iOS and iTunes, Apple Music has grown fairly rapidly, having only launched in June 2015. Last week a major redesign was previewed, which should in theory make it easier to find new content and navigate in general.

Comments

  • Reply 1 of 18
    irelandireland Posts: 17,584member
    "but regardless..." "which should in theory" as part of a report?
    edited June 2016 ceek74
  • Reply 2 of 18
    ceek74ceek74 Posts: 323member
    ireland said:
    "but regardless..." "which should in theory" as part of a report?
    They're actually part of the "report"  :) 
  • Reply 3 of 18
    Of course Apple Music is profitable. We don't know HOW profitable it is, but I can guarantee they're not losing money on every subscriber. This is not iMessage or other service Apple operates to make their iOS devices more desirable.

    Spotify, on the other hand, is still losing money. How long will that go on before they make changes to their free subscription to get users to start paying?
    mike1lostkiwijbdragon
  • Reply 4 of 18
    sockrolidsockrolid Posts: 2,788member
    Sounds bad for Pandora.  They only operate in the US, Australia, and New Zealand.
  • Reply 5 of 18
    geekmeegeekmee Posts: 319member
    "Spotify has yet to turn a profit..." Or another way of putting it... They are running an unsustainable business model.
    slprescottlostkiwijbdragon
  • Reply 6 of 18
    geekmeegeekmee Posts: 319member
    ...and before I get accused of being a fanboy...I don't subscribe to any streaming service.
  • Reply 7 of 18
    MarvinMarvin Posts: 14,217moderator
    Spotify, on the other hand, is still losing money. How long will that go on before they make changes to their free subscription to get users to start paying?
    They got $1b loan recently:

    https://techcrunch.com/2016/03/29/stream-with-the-devil/
    http://www.musicbusinessworldwide.com/spotify-revenues-topped-2bn-last-year-as-losses-hit-194m/

    Given that they have had net losses of 55m euros (2013), 162m euros (2014), 173m euros (2015), they'll probably burn through $1b in less than 5 years. I don't know why people would loan a company making those kind of losses $1b that has to be repaid with interest. They plan to spend it on marketing when they spent 246m euros in 2015 on marketing.

    Their financials show how little their ad-supported tier makes:


    They make nearly 90% of their revenue from the 30% subscribing users. Per user, it's $2.78 per year for ad-users and $58 per subscriber ($4.99/month). It makes sense that Apple decided to go subscription-only. Spotify will try to convert the ad-tier into paying with direct marketing but some people will never want to pay for music. It's hard for young people to pay for anything not having credit cards so they go to the ad-supported services. Apple could attract some of the ad-tier with a topup model and they can have a minimum topup e.g $10 in order to keep revenue up. If someone listens to 1 hour per day of music, they'd need to pay about $22 per year. If they topup $120, they would automatically qualify for the unlimited streaming for the rest of the year. Kids can get gift cards that let them do this so $50 from grandparents gives them about 1000 hours of music. Even for heavy listeners, that's a good 8 months of music.

    The problem Spotify has, as well as other streaming companies, is that their entire business depends on this and it's clearly not that profitable. Apple doesn't depend on this and nor will Amazon when they launch their overhauled streaming service:

    http://www.theverge.com/2016/1/28/10858816/amazon-subscription-music-rumor-spotify

    The musicians will get better rates being exclusive to the higher priced services. As long as there isn't an easy route for young people to pay for it, the ad-supported services will be in demand but if they aren't sustainable long-term then that will work itself out over time and those people will revert to acquiring music for free from another source with negligible revenue loss for the paid streaming services.
    jasenj1
  • Reply 8 of 18
    The only figures here I see worthy of consideration are 30M for Spotify and 15M for Apple Music. Spotify was founded 10 years ago, Apple Music is just under a year old – this tells me all I need to know here: one product is mature, the other has just started. – Spotify are obviously fixated on Apple Music as it's a threat to their whole business, this isn't reciprocated by Apple, but is definitely a needed service for platform stickiness.
    lostkiwicroprjbdragon
  • Reply 9 of 18
    croprcropr Posts: 934member
    Of course Apple Music is profitable. We don't know HOW profitable it is, but I can guarantee they're not losing money on every subscriber. This is not iMessage or other service Apple operates to make their iOS devices more desirable.

    Spotify, on the other hand, is still losing money. How long will that go on before they make changes to their free subscription to get users to start paying?
    If Spotify has 30M paying subscribers and not making a profit, how can you be sure that Apple is making a profit with 15M paying subscribers.  The costs for the streaming infrastructure and software and for the marketing won't be that different, while Apple has only half of the revenue
  • Reply 10 of 18
    wdowellwdowell Posts: 208member
    Given all the advertising, and all the way the built-in music app pushes full screen ads on the user, and the way Apple has given 3 month trials out, you HAVE to think Apple is dissapointed at the traction of AppleMusic
  • Reply 11 of 18
    wdowellwdowell Posts: 208member
    If Spotify has 30M paying subscribers and not making a profit, how can you be sure that Apple is making a profit with 15M paying subscribers.  The costs for the streaming infrastructure and software and for the marketing won't be that different, while Apple has only half of the revenue
    There is one difference for Apple - they dont have to pay themselves the 30% tax. so the market is rigged in Apple's favour.
    edited June 2016 singularity
  • Reply 12 of 18
    crowleycrowley Posts: 5,822member
    wdowell said:
    If Spotify has 30M paying subscribers and not making a profit, how can you be sure that Apple is making a profit with 15M paying subscribers.  The costs for the streaming infrastructure and software and for the marketing won't be that different, while Apple has only half of the revenue
    There is one difference for Apple - they dont have to pay themselves the 30% tax. so the market is rigged in Apple's favour.
    15% now if the subscription lasts longer than a year.

    It would be interesting to know how many of Spotify's customer pay through IAP.
  • Reply 13 of 18
    genovellegenovelle Posts: 936member
    cropr said:
    Of course Apple Music is profitable. We don't know HOW profitable it is, but I can guarantee they're not losing money on every subscriber. This is not iMessage or other service Apple operates to make their iOS devices more desirable.

    Spotify, on the other hand, is still losing money. How long will that go on before they make changes to their free subscription to get users to start paying?
    If Spotify has 30M paying subscribers and not making a profit, how can you be sure that Apple is making a profit with 15M paying subscribers.  The costs for the streaming infrastructure and software and for the marketing won't be that different, while Apple has only half of the revenue
    The are not paying to support streams for 70 million freeloaders indefinitely. 
    edited June 2016
  • Reply 14 of 18
    genovellegenovelle Posts: 936member

    wdowell said:
    If Spotify has 30M paying subscribers and not making a profit, how can you be sure that Apple is making a profit with 15M paying subscribers.  The costs for the streaming infrastructure and software and for the marketing won't be that different, while Apple has only half of the revenue
    There is one difference for Apple - they dont have to pay themselves the 30% tax. so the market is rigged in Apple's favour.
    Not a tax because they support the platform and pay all the marketing and processing cost. Why do you think Apple Music excellerated their growth but Google's attempts at streaming services didn't have the same effect. 
    edited June 2016
  • Reply 15 of 18
    croprcropr Posts: 934member
    wdowell said:
    If Spotify has 30M paying subscribers and not making a profit, how can you be sure that Apple is making a profit with 15M paying subscribers.  The costs for the streaming infrastructure and software and for the marketing won't be that different, while Apple has only half of the revenue
    There is one difference for Apple - they dont have to pay themselves the 30% tax. so the market is rigged in Apple's favour.
    Spotify users don't pay 30% tax to Apple, and it is not beacuse they have Andorid phones.
    A user has much better deals, if he goes directly to the Spotify site for the subscription.  Currently offer is $0.99 for the first 3 months, and thereafter $9.99 p.m.  An inapp purchase via the app store costs $12.99 p.m from the first month.  A user must be quite stupid to pay 30% extra.
  • Reply 16 of 18
    croprcropr Posts: 934member
    genovelle said:

    wdowell said:
    There is one difference for Apple - they dont have to pay themselves the 30% tax. so the market is rigged in Apple's favour.
    Not a tax because they support the platform and pay all the marketing and processing cost. Why do you think Apple Music excellerated their growth but Google's attempts at streaming services didn't have the same effect. 
    An app developer pays $99 a year as platform costs
    As an app developer I can tell that there is no longer a decent return on the 30% Apple is charging. Unless you are among the very few that are selected by the Apple Marketing department, Apple does exactly nothing,   If you don't put a expensive marketing campaign in place, your app remains unknown among the more than 1M apps. The lousy search function in the App Store App does not help neither.
  • Reply 17 of 18
    jbdragonjbdragon Posts: 2,110member
    cropr said:
    Of course Apple Music is profitable. We don't know HOW profitable it is, but I can guarantee they're not losing money on every subscriber. This is not iMessage or other service Apple operates to make their iOS devices more desirable.

    Spotify, on the other hand, is still losing money. How long will that go on before they make changes to their free subscription to get users to start paying?
    If Spotify has 30M paying subscribers and not making a profit, how can you be sure that Apple is making a profit with 15M paying subscribers.  The costs for the streaming infrastructure and software and for the marketing won't be that different, while Apple has only half of the revenue
    Apple doesn't have about 75% of it's listeners draining the bank account. Apple is not spending large amounts of money on Advertising Apple Music. Apple is not releasing a Apple Music App on a zillion platforms. Apple doesn't even have to turn a profit, but I'm sure they're at least breaking even, or close to it.
  • Reply 18 of 18
    crowleycrowley Posts: 5,822member
    It does need to run a radio station with multiple broadcasts. I wonder how much Beats 1 sets them back as a proportion of Music revenue.  Probably not a whole lot.
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