Apple Music was launched in June 2015 and is now available in more than 100 countries. In a mere 18 months, Apple Music’s paid subscription base has grown to 20 million subscribers. But the interesting aspect of Apple Music’s user base is that over 50% of subscribers live outside United States.
Despite starting four years later than current market leader Spotify, Apple Music has quickly grown to half its size. And if the current growth rate continues, Spotify’s leadership position in the music streaming market will more likely than not come under fire from the iPhone maker.
Earlier this year, Jackdaw Research showed how Apple Music subscription growth had resumed after slowing down during the January to April 2016 period. The service picked up speed in the second half the year, reporting 15 million subscribers in June, 17 million in September and now approaching 20 million.
The growth spells good news for Apple’s surging services portfolio. Apple Pay and Apple Music are the pillars of their services strategy, and could easily become stable revenue streams for many more years to come, while giving Apple loyalists more reasons to stay put within Apple’s ecosystem.
It must be also be noted that Apple Pay (October 2014) and Apple Music (June 2015) are not even three years old and are already proving to be a hit. That validates what we’ve been saying all along – that tech companies looking to survive and grow over the next several decades must necessarily build robust ecosystems around their core products and services.
Google is a master of this strategy: everything they do outside of Other Bets is either designed to generate revenues or designed to drive traffic to revenue-generating parts of their business.
But Apple is yet to get its feet wet with this approach.
They seem to have learned their lesson after this year’s disappointing performance in device sales. Now, all they need to do is continue to leverage their smartphone user base and keep adding services that add value – as opposed to mere “image” – to owning an iPhone.
In the words of Eddy Cue, Apple’s SVP for Internet Products and Services:
“…of course we want more and we want it to go faster — we’re hungry! We can’t forget that, as an industry, we still have very few music subscribers. There are billions of people listening to music and we haven’t even hit 100 million subscribers. There’s a lot of growth opportunity.”
That’s the only kind of stand that can take Apple Music from “like Spotify” to “the only music streaming service you’ll ever need.” It’s a long, hard journey for Apple, but if they can get their act together and execute a prolonged strategy, it will serve them for several decades to come. They cannot afford to lose this golden opportunity in their hands.
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