Apple Music recently passed the 40 million paid subscribers mark. Just like old reports about now-tiny-looking “records” set by Apple, however, those numbers could soon be dwarfed thanks to Apple Music’s rapid growth.
According to a new report, Apple Music is set to achieve annual growth of 40 percent a year over the next three years. By our math, that would mean that Apple is looking at around 110 million users by around 2021.
The prediction comes from analyst Ben Schachter of Macquarie Capital. Based on the fact that Apple Music gained 2 million subscribers in just a couple of months, he suggests it is set to become the fastest-growing sector of Apple’s important Services division.
But he also notes that music streaming is far from the profitable business Apple is in. That’s because the royalties Apple has to pay to artists and record labels equates to a gross margin of around 15 percent.
Apple’s race to the top
At its current trajectory, Apple Music is on track to overtake Spotify for paying customers in the U.S. this summer.
It has had an impressive year so far, with hip hop artist Cardi B recently breaking Taylor Swift’s record for first week Apple Music streams for an album by a female artist. According to Apple, Cardi B’s Invasion of Privacy earned more than 100 million streams in its initial week.
Apple Music has also experienced a bit of a shakeup as Jimmy Iovine ended his reign as boss of the streaming music service, and Oliver Schusser taking over as chief of Apple Music Worldwide.
In addition to Apple’s streaming music service, it additionally plans to reportedly launch a subscription magazine service in the next year.
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