Apple Music estimated at 21M North American listeners, converting at 2.5 times rate of Spotify

Apple Music is advancing rapidly against Spotify in terms of paid subscribers, in no small part because of its captive marketing audience, according to an analyst memo shared with AppleInsider on Tuesday.

"Adjusting for addressable market...Apple is converting potential customers into paying customers at a rate 2.5x faster than Spotify," writes Loup Ventures analyst Gene Munster. In North America, where Apple CEO Tim Cook recently claimed to have overtaken Spotify in paid customers, Munster estimates that Apple Music has 21 million subcribers versus Spotify's 20 million.

The analyst suggests that while Apple's conversion rate can be attributed partly to iPhone owners having more disposable income, the bigger factor is Apple's control of iOS — which not only provides a "seamlessly integrated music experience," but built-in advertising working to persuade people to subscribe. The company has so far denied integration of third-party streaming services into iOS and Siri, and while Spotify may be popular, iPhone owners must actively seek it out.

Apple Music has "room to grow," with 45 million global subscribers out of some 780 million active iPhone users, Munster says. Spotify is still said to dominate the global music streaming market, though its share has slid year-over-year from 65 to 62 percent. Apple has grown from 30 to 34, while Pandora has slipped from 6 percent to 4.

Spotify is said to have at least one advantage, which is that it works well on both iOS and Android devices. While Apple Music is technically available for Android, Munster estimates that 95 percent of subscribers are on iOS. Many of the reasons to use the service disappear on Android, such as Siri voice commands or HomePod compatibility.

Unmentioned by Munster is the fact that unlike Apple, Spotify has a free, ad-supported tier in addition to subcriptions. Though free listeners generate less money, they can stick with the service beyond any trial period, and eventually sign up if they have the money for monthly fees. Spotify has 180 million or more listeners worldwide, of which 83 million are Premium subscribers.

Latest Exclusives

Latest comparisons

11 Comments

SpamSandwich 32917 comments · 19 Years

About 6 years ago

How’s that Apple Television (not to be confused with Apple TV) doing Gene? Coming out any day now?

ravnorodom 721 comments · 8 Years

I just signed up for Apple Music. It offers what others don't: anime theme songs, movie soundtracks and extensive collection of A to Z-POPs. The best part is when I "SoundHound" a track, it finds the song from Apple Music and automatically adds it to a Playlist.

racerhomie3 1264 comments · 7 Years

Don’t forget,with Shortcuts Support, Pandora & iHeartRadio can also get Siri support & better iOS integration.
watchOS 5 also helps with apps getting offline playback support.

gmgravytrain 884 comments · 8 Years

Wall Street is only going to look at AppleMusic's subscriber base from a global perspective which will make it fall well short of Spotify which will definitely not help AppleMusic's value to help boost Apple's overall value. AppleMusic will remain tied to how many iPhones Apple can sell globally which is a relatively limited amount when compared to Android devices. Spotify runs on almost every device out there. AppleMusic not so much. Apple's only alternative is to keep holding on to older iOS users and gain at least a tiny amount of new iOS users every year. AppleMusic will never be valued by Wall Street even close to Spotify. Spotify has a share price of $180 with an EPS of -10.2x. That's just friggin crazy. I'll bet AppleMusic isn't even valued a tenth of that and there's no way AppleMusic would have a negative EPS as there are only paid subscribers. Spotify is automatically being given the benefit of the doubt by investors while AppleMusic is basically being overlooked in terms of value.

Notsofast 450 comments · 8 Years

gmgravytrain said:

Wall Street is only going to look at AppleMusic's subscriber base from a global perspective which will make it fall well short of Spotify which will definitely not help AppleMusic's value to help boost Apple's overall value. AppleMusic will remain tied to how many iPhones Apple can sell globally which is a relatively limited amount when compared to Android devices. Spotify runs on almost every device out there. AppleMusic not so much. Apple's only alternative is to keep holding on to older iOS users and gain at least a tiny amount of new iOS users every year. AppleMusic will never be valued by Wall Street even close to Spotify. Spotify has a share price of $180 with an EPS of -10.2x. That's just friggin crazy. I'll bet AppleMusic isn't even valued a tenth of that and there's no way AppleMusic would have a negative EPS as there are only paid subscribers. Spotify is automatically being given the benefit of the doubt by investors while AppleMusic is basically being overlooked in terms of value.

I think you might be confused. Apple Music isn't a separate company and isn't valued as such by Wall Street investors. It's value also goes well beyond the direct subscribers as it enhances the entire ecosystem and it allows those 50-60 million and rising subscribers to be monetized any number of ways, such as with the upcoming video streaming service. Most importantly, Spotify is in very precarious financial position as it has never made money and is hemorrhaging money at an alarming rate. It is a one trick pony based on a few wealthy venture capitalists betting on being bought out. It can't raise prices as music streaming has become close to a "commoditized" business where consumers largely choose on price; that's why it has had to match every price discount Apple has offered. Thus, Spotify can't raise prices as its costs rise because Apple, Amazon and Google have enormous business with large revenue streams other than their music streaming. I bet your farm on Spotify as their only hope is someone buys them.