Apple Music and Spotify make up 80 percent of U.S. streaming subs


Streaming services like Apple Music dominate the US music market
Streaming subscriptions in the U.S. have come a long way!
Photo: Apple

Streaming music has come a long way! According to a new report, the number of people now paying a monthly music streaming subscription in the U.S. is around 51 million. That’s close to double the number at the end of 2016!

In total, last year, streaming music services accounted for 65 percent of the recorded music revenue in the U.S. Spotify and Apple Music combined dominate “at least 80 percent” of the domestic music streaming market, and other platforms — including ones belonging to big names like Amazon and Google — are already, “falling surprisingly far behind.”

In addition to Spotify and Apple, which supposedly have north of 20 million subscribers each, the report lists the main players as Amazon Music Unlimited, Google/YouTube Music, Pandora Plus/Premium, and iHeartRadio All Access/Plus. Amazon Prime Music was not included in the report, since it is bundled with Amazon Prime.

Napster, Tidal, and Deezer are also described as being active, although MusicWatch managing partner Russ Crupnick told Billboard that these services, “are very small.”

Insights into streaming music habits

The Billboard article notes several other interesting points. For starters, paying subscribers are described as being 240 percent more likely to use a smart speaker — thereby calling into question why HomePod has so far lagged behind its rivals when it comes to user adoption.

Another interesting tidbit is the fact that, apparently, users don’t care all that much about curation or personalized playlists. This is something that Apple repeatedly talks up about Apple Music, making a point of saying how algorithms could never match up to a human expert. Billboard writes that:

“In investor- and industry-facing presentations, the dominant streaming services have been beefing up their curation prowess as a key differentiating factor in the streaming wars — from Spotify’s RapCaviar and Discover Weekly, to Apple Music’s personalized mix series, to Amazon Music Unlimited’s ‘Song of the Day.’

But the reality is that most users don’t care about playlists when deciding whether to pay for a service, and playlists don’t provide enough immediately-apparent value to convince users on the edge. Curation and ‘new music discovery’ nowadays are arguably just table stakes — a fact reflected in Spotify’s recent upgrade of its free tier, which allows freemium users access to up to 15 editorial and algorithmic playlists on demand in any order.”

Apple vs. Spotify

In May this year, Apple announced that Apple Music has passed the 50 million active user mark. Spotify, by comparison, had around 83 million subscribers by the end of June.

While Apple may not (yet) be the big winner in this domain, however, it does have one giant advantage. Spotify has yet to make a profit, and requires a constant influx of cash to keep going, based on the idea that it can turn a profitability corner down the road. Apple, on the other hand, can afford to treat Apple Music like a loss leader to get more people into the Apple ecosystem.

“We’re not in it for the money,” Cook told Fast Company this summer. Although it’s possible to read that as suggesting that Apple is simply in the music streaming business for the love of music, a more accurate reading may be that it simply doesn’t need to rely on Apple Music to make money.

With a giant cash pile in its corner, Apple can afford to play a war of attrition with other companies: piling on more and more features, and offering more and more exclusives, in a way that others simply can’t manage.

Are you a streaming music subscriber? Which service do you subscribe to? Let us know in the comments below.

Source: Billboard