Spotify maintains lead on Apple Music with 87M paid subscribers

Posted:
in General Discussion
Spotify is continuing to show progress towards profit, posting better financial results for its third quarter -- including its all-important number of Premium subscribers, which rose from 83 million in June to 87 million.

Spotify on iPhone.
Spotify on iPhone.


Including free, ad-based listeners, the company now has 191 million users in total. Premium subscribers are more valuable to the company though as they generate 90 percent of revenue, Reuters noted.

Revenue increased 31 percent in Q3 to 1.352 billion euros, or about $1.54 billion, while gross margins were up year-over-year from 22.3 percent to 25.3. Analysts had typically been expecting figures of 1.33 billion euros and 24.9 percent.

The company did disappoint in one area, reining in its goal for full-year 2018 listeners to between 199 million and 206 million. The average analyst forecast was 208 million.

Apple Music has struggled to catch up with Spotify in terms of global paid subscribers, its last reported figure being 50 million combined trial and subscriber customers. There is no free version of the service beyond a three-month trial, which may be giving Spotify an edge in allowing more people to become hooked. Spotify is also more platform-agnostic -- Apple Music is tightly integrated into Apple products, but has a barebones presence on Android and non-HomePod smartspeakers.

Apple has eclipsed Spotify in North America, likely because of the popularity of iPhones, heavy marketing, and a focus on genres like rap and hip-hop.

The company could announce updated subscriber numbers during today's quarterly results call, scheduled for 5 p.m. Eastern time.

Comments

  • Reply 1 of 10
    NY1822NY1822 Posts: 617member
    considering i could fill up my tank with gas and get a 6-month subscription for free to a music service and this counts as a paid subscriber, I don't put much weight in these numbers.
    (my example was said in jest, however, the new trend is to bundle music subscriptions to other products/services, so the "paid/premium" subscribers may not otherwise "paid" had they not been buying their other product/service).
    edited November 2018 lolliverwatto_cobra
  • Reply 2 of 10
    Yeah, but how many of those paid subscribers pay discounted fee for their service? I used Spotify for a whole year paying $1 a month. Anyways, I love Spotify's algorithm, I think is better than Apple's Music.
  • Reply 3 of 10
    jbdragonjbdragon Posts: 2,189member
    Apple doesn't need to have more users than Spotify. Apple only needs to break even or make a small profit. Spotify has been around now for 10 years and has never turned a profit. In fact every year they lose more money. As they get larger, they lose more and more money. They have been a money pit. How long can they keep this up? It's all those free leaches putting a big drain on them. Good starting up to get people on board and make a name for yourself. But at this point, all those free users make their numbers much larger. If they stop that, they would lose a lot of people, and their worth would come crashing down. So now they're stuck.

    The other thing is they are at the mercy of the music industry. They really have no other source of income. How much longer are people going to give them millions to keep their doors open? If they can get into the black and stay there, it'll going to take years to get out of debt.
    edited November 2018 lolliverwatto_cobra
  • Reply 4 of 10
    jbdragon said:
    Apple doesn't need to have more users than Spotify. Apple only needs to break even or make a small profit. Spotify has been around now for 10 years and has never turned a profit. In fact every year they lose more money. As they get larger, they lose more and more money. They have been a money pit. How long can they keep this up? It's all those free leaches putting a big drain on them. Good starting up to get people on board and make a name for yourself. But at this point, all those free users make their numbers much larger. If they stop that, they would lose a lot of people, and their worth would come crashing down. So now they're stuck.

    The other thing is they are at the mercy of the music industry. They really have no other source of income. How much longer are people going to give them millions to keep their doors open? If they can get into the black and stay there, it'll going to take years to get out of debt.
    I agree, this company has no real path to profitability. I feel pretty good about my 2 year put positions.
    watto_cobra
  • Reply 5 of 10
    Apple has been buying up music entities like Shazam, and is now moving to pick up 20 billion in debt iHeartMedia.

    My money is on Apple burying Spotify, or acquiring them.


    edited November 2018 watto_cobra
  • Reply 6 of 10
    • Tidal HiFi + MQA is the best by far.
    • Spotify's discovery and playlist engine is amazing but the 320K OGG sounds like crap.
    • Apple's 256K AAC sounds better than Spotify but, like most of Apple's services, it's poorly implemented.
    • Poor little Pandora.
    • C'mon Qobuz, let's make this happen.
  • Reply 7 of 10
    maestro64maestro64 Posts: 4,678member
    I suspect they most of these paid users we college students paying $5/ month not the full subscription. My kids pay the $5 because they also get Hulu for free as well. Spotify is hoping when these student get out of school will them turn into full subscribers. I would bet this will not happen.
    lolliverwatto_cobra
  • Reply 8 of 10
    I love my Spotify. Premium membership here. 

    The recommendations playlists are on point “Daily Mix”. Way more accurate than Apple Music. I appreciate the better playlists too. 

    Lots of hate here for Spotify. Every. Time. Sad. 

    I do like my Apple Music but find myself using Spotify way more often. 

    Also, as a working DJ I can access my Spotify account from within the DJay Pro app. Win. 

    Both are good, but I lean towards Spotify more often. 
  • Reply 9 of 10
    davgregdavgreg Posts: 481member
    Apple Music is an abject failure. If rental is “the future of music”, then music is in deep trouble.

    Apple has been reported to have in excess of 800 million iTunes accounts. To have only a tiny fraction of that after all this time, promotion and such. 1/16 is not a success and apparently that includes every freebie sub being given away.

    As to the comment saying Spotify has yet to make a dime, the same is true of the Netflix streaming service.
  • Reply 10 of 10
    Johan42Johan42 Posts: 163member
    Love iPhones, Hate Apple Music. It’s been 3 years since launch and it still sucks donkey bum. The algorithm never gets anything right. Daily Mixes are always full of crap that’s similar to what I Disliked. It brings songs of a completely different genre into my stations, and it repeats the same songs over and over and over again. Too bad Spotify and Pandora don’t have all the songs I love, or else I would have cut AM loose a long time ago.
    paisleydisco
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