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Apple Music has more paid users in the US market than Spotify

According to The Wall Street Journal, Apple Music’s streaming music service Apple Music has more paid users in the US market than its main competitor Spotify, while Apple Music’s user growth rate is still higher than Spotify, as of February 2019, Apple Music The number of paying users in the US market is approximately 28 million.

Apple Music and Spotify have not officially disclosed the number of users in each region. According to people familiar with the matter, Apple Music has more than 28 million paid users in the US market in February 2019, and Spotify has 26 million paying users. Does not include trial period users. If you compare the number of users, Spotify still stays ahead.

According to the current trend of user growth, Apple Music surpassed the number of paid users in Spotify in the US market about 6 months ago. The latter has carried out several promotions in order to maintain the user’s total advantage. The joint streaming platform Hulu launched a discount package. Recently, Spotify also filed an anti-monopoly complaint in Europe, accusing Apple of abusing the control of the App Store to suppress competitors. The case is still pending.

From the global market point of view, Spotify still maintains a huge lead for Apple Music. By December 2018, Spotify has more than 207 million active users in the global market, including 96 million paying users, while other users choose a free version with advertising services. Apple Music does not offer a free version with 50 million paying users worldwide.

Apple Music’s monthly user growth rate is about 2.6%~3%, which is higher than Spotify’s 1.5%~2%. It is good news for Apple, which has high hopes for software and Internet service providers. Apple’s financial report in January 2019 is called iPhone. Smart phone sales fell 15%, sales and profits in the Christmas shopping season fell for the first time, including business growth in streaming music services, Apple Care and Apple Pay, which reduced the impact of weak iPhone sales on company performance, Apple’s The software and services business grew at a rate of 19% to $10.88 billion.

System resources actively expand customer level

The advantage of developing software and services is that Apple has 101 million active iPhones in the global market, Apple Music is a streaming music service with built-in iOS system, and Apple uses huge hardware product enablement rate and popular iTune digital Download the platform to promote streaming music services.

At the same time, Apple has also invested huge marketing budgets to promote streaming music services. According to information from the advertising service monitoring company Spot.tv, Apple is good at advertising to increase the subscription volume of online services. Since 2016, Apple Music has been in major US television stations. The cost of advertising is twice that of Spotify, and there are a number of large events that offer expensive ads, such as the NFL Super Bowl and major awards.

However, the profit margin of the streaming music business itself is not high. Due to the huge copyright fees, the revenue of streaming music services needs to be shared among platform operators, publishers and original authors. According to RBC Capital Markets, streaming music services are displayed. The profit margin is about 15%.

The competition between the major platforms is becoming increasingly fierce, competing for copyright and singers, further reducing profit margins. The 15% profit margin makes Apple Music’s overall profit margin difficult for Apple, which is almost the lowest profit margin among all Apple businesses. For Apple, it is more affordable than other streaming services companies to withstand low-margin business models, and the development of Apple Music has increased the market competitiveness of other hardware products.

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Poorva Virmani
As Global Chief Creative Officer at TechGrits, Poorva helps team ambition to burnish the media's creativity product and reputation.