Streaming: As the Competition Heats-up, has Apple Taken the Lead Over Spotify in the U.S. and Who Else is "Getting In the Game"?

  Author: Jason Davis, President of One One 7 Entertainment

Author: Jason Davis, President of One One 7 Entertainment

        In February, 2018 The Wall Street Journal predicted that Apple Music could overtake Spotify this summer.[7] Has that time arrived? What are the current statistics and predictions? With music revenue streaming having a 53% increase in 2017, it’s no wonder that more streaming platforms are changing their systems and trying to “get in the game”.[1]

        According to Digital Music News, there is an undisclosed reliable source (an unnamed US-based major distributor) indicating Apple has in fact surpassed Spotify in subscribers.[8] The referenced report supposedly confirms that Apple Music has now taken the lead and is ranked as first in the U.S. among on-demand music streaming services.[8] Financial Times printed their own statistics on July 9, 2018. The Financial Times Report specified that as of the start of July 2018, Apple had between 21m and 21.5m U.S. subscribers; all the while, Spotify had 22m to 22.5m, according to their industry executive sources.[6] Regardless of which report is the most accurate, all agree that Apple will exceed Spotify in subscribers and continue to broaden the gap over the next few months. The growth from last year is real and continuing on an upward trend which continues to emphasize the importance of streaming in the music industry. With Spotify at about 17m US subscribers to Apple’s 13m in 2017, the new numbers are greater than the 5% per month increase expected to occur with Apple and the 2% expected continued increase for Spotify.[6] Although, nobody argues that Spotify is still in the lead worldwide with their over 75m paying customers comparing to Apple’s 45m.[6],[8]

        The U.S. streaming markets are watched closely, because the U.S. is now the most important streaming market internationally with 40 percent of total worldwide music profits.[1] The digital music streaming possibilities are also more competitive in pricing in the U.S. than other markets; thereby, giving consumers options to explore how they want to hear their favorite songs.

        Over the years, Spotify has been maintaining their lead due to the Spotify catalog of 30m songs and playlists.[5 ]  However, the competitors are catching on and changing theirs platforms to be more competitive in the streaming market. With so much money at stake it’s no wonder that Apple, Amazon, Google, YouTube, Tidal, Pandora and more are altering their models to parallel that of Spotify. By modifying the Google streaming platform to YouTube Remix, they will have the advantage of continuing to have YouTube videos while offering similar streaming options as Spotify and Apple.[7]  Amazon is also making sure their customers know they are a contender in the streaming market and claims to have over 10 million subscribers.[6 ]Tidal would have the ability to compete with their song library and ability to watch videos; however, so far their pricing continues to be higher than the other platforms, which is overriding the quality CD sound they have to offer. [2 ]Pandora is maintaining the radio feel by continuing to offer listening services to their channels and is therefore not in the same category that requires searches and the creation of playlists. [2]

        Considering the streaming possibilities, the money involved and the increase in streaming subscribers, this market will continue to be watched closely. Apple will likely continue their growth and pull into the lead; nonetheless, like any business, more competitors will continue to emerge and continue to modify to mimic those like Spotify and Apple who are leading in the game.

 

Bibliography / Works Cited

1.  Christman, Ed. “Music Streaming Revenue Increased 53 Percent in 2017, Digital Services Report.” Billboard, Billboard, 26 Jan. 2018, www.billboard.com/articles/business/8096452/digital-revenue-streaming-music-2017-dima-midia-report.

2.  Deleon, Nicholas. “Best Music Services.” Consumer Reports, Consumer Reports, 8 May 2018, www.consumerreports.org/streaming-media/best-music-streaming-service-for-you/.

3.  Fingas, Jon. “Apple Music Could Overtake Spotify in the US This Summer.” Engadget, Oath Tech Network, 4 Feb. 2018, www.engadget.com/2018/02/04/apple-music-could-overtake-spotify-in-the-us/.

4.  Jejede, Dara. “Free Report: Digital Music Is Streaming Forward.” MIDiA Research, MIDiA Ltd, 19 Apr. 2018, www.midiaresearch.com/blog/free-report-digital-music-is-streaming-forward/.

5.  Matsa, Nassia. “The MBA View: Is Spotify a Worthwhile Investment?” Financial Times, Financial Times, 10 Apr. 2018, www.ft.com/content/4fe420e6-3be5-11e8-b9f9-de94fa33a81e.

6.  Nicolaou, Anna. “Apple Slices into Spotify's Lead in US Music Market.” Financial Times, Financial Times, 9 July 2018, www.ft.com/content/ef2be1bc-809f-11e8-bc55-50daf11b720d.

7.  Nicolaou, Anna. “Google Takes on Apple and Spotify with New Music Service.” Financial Times, Financial Times, 20 May 2018, www.ft.com/content/21e0d8ca-5bec-11e8-9334-2218e7146b04.

8.  Resnikoff, Paul. “Apple Music Just Surpassed Spotify's U.S. Subscriber Count.” Digital Music News, Digital Music News, 6 July 2018, www.digitalmusicnews.com/2018/07/05/apple-music-spotify-us-subscribers-2/.

9.  Steele, Anne. “Apple Music on Track to Overtake Spotify in U.S. Subscribers.” The Wall Street Journal, Dow Jones & Company, 5 Feb. 2018, www.wsj.com/articles/apple-music-on-track-to-overtake-spotify-in-u-s-subscribers-1517745720.