Along with more than 20-million other people in the world, I’m one of those who likes Apple Music. It’s a bit messy and convoluted, and unlike iTunes, there’s a learning curve, but once you go through the rigmarole to get it set up for you, Apple Music just works.
Why is it that streaming music competitor Spotify is growing faster than Apple Music?
Spotify is available in most of Europe, most of the Americas, Australia, New Zealand and parts of Asia. It is available for most modern devices, including Windows, macOS, and Linux computers, as well as iOS and Android smartphones and tablets. Music can be browsed or searched by artist, album, genre, playlist, and record label. Users can create, edit and share playlists, share tracks on social media, and make playlists with other users. Spotify provides access to over 30 million songs. As of June 2016, it has 100 million monthly active users, and as of March 2017, it has 50 million paying subscribers.
Put another way, Spotify is eating Apple Music’s lunch. That’s 50-million paying customers vs. less than half that on Apple Music. Wait. Isn’t Apple Music the newcomer? Yes. It’s not even two years old so it’s growing fast thanks to Apple’s installed customer base of about 1-billion Mac, iPhone, and iPad customers, not to mention a couple billion more that use Windows and Android.
Spotify is growing faster. Why?
Part of the reason may have to do with differentiation (a topic I’ve written on extensively). There isn’t much. Why would a Spotify user ditch their subscription for Apple Music? The price is the same. The music is the same. Spotify runs on most of the same devices you’ll find Apple Music.
To its credit, Apple is working on differentiation by creating original television content ala Netflix and Amazon, but that takes years to make an impact. iTunes gets some artists first and that helps Apple Music, but it hasn’t slowed down Spotify’s growth.
Apple is notorious for being late to a new party, then putting together all the pieces that make their entry the direction to go. iPod, iPhone, iPad, Watch. Apple was late to each segment, but put together the best package.
Apple Music is different. Apple was very, very late to the game, and the package it brought was a convoluted, overly complex mess that tried to do too much and failed at most of it. It’s not as bad after 20 months, but it’s still a mess.
As close as music and iTunes is to Apple’s DNA, I worry that Apple’s heart really isn’t into Apple Music. Everybody has the same 30-million songs. Streaming on one device is the same as streaming on another. Oh, and by the way– there’s no money in streaming music, and we all know how Apple likes to make a profit.
Spotify has 50-million paying customers and still can’t make a buck. Maybe Apple should buy Pandora Radio, another competitor. Except Pandora doesn’t make any money, either. Pandora Radio tops Spotify and Apple Music with 70-million active monthly users, but that doesn’t translate into profit, either.
Apparently, streaming music is a tough business to make money. Why does Apple even care? Money. Apple makes hardware that plays music. Mac, iPhone, iPad, Watch, Apple TV. Oh, and don’t forget the #1 headphone maker, Beats. So, Apple has a vested interest in being a big player in music, even if there’s not enough money to find its way to the bottom line. Thanks to big hardware sales and high gross margins, Apple does OK. But what of Spotify and Pandora Radio?
Methinks they have a terrible, horrible, no good, very bad business model.