Apple Inc. ’s music streaming service now has more than 10m subscribers, says a report from FT. People familiar with the matter inform that Apple has touched the mark too fast taking just six months while its arch rival Spotify took six years to reach 10m subscribers.
Music streaming – a growing industry
Apple Music was launched in more than 100 countries in June. Mark Mulligan, a music industry analyst working with Midia Research told FT, “It’s good news that Apple is making streaming work but it is also going to accelerate the decline of downloads.”
The rate at which Apple was gaining on Spotify was really amazing, and its current growth rate had the potential to lead music subscription service sometime in 2017, said Mulligan.
Streaming is becoming a dominant form of digital music consumption, and is growing at a high rate as download sales decline. The music industry has a lot of hope from this form of distributions after it remained in the doldrums for a complete decade. A decline of 9% was seen in total sales of album downloads in 2014 in the US while a decline of 12% was seen in the sales of individual tracks as per Nielsen Music data. However, an increase in demand of more than 50% was seen in streaming with 164bn songs streamed, the report says.
Will Apple Music takeover Spotify?
Spotify and Apple Inc. are clearly leading the race in the music streaming industry. Spotify has a valuation of more than $8bn, and has already laid the groundwork for an IPO. In June, Spotify reached a noteworthy milestone with 20m paying subscribers and 75m active users. In June, Spotify said that over the last year ending June 10, 2015 – it added an average of one new subscriber every three seconds.
If Spotify hits the same growth rate, then to date, it would have added 6m more subscribers, and if the rate is increased, then it could have 26m subscribers by now, “if not more, ignoring one big caveat; these estimates assume we’re talking about net growth, and that there wasn’t a mass exodus from Spotify to Apple Music last year,” says a report from VentureBeat.
Apple Inc. Music’s success does not come as a surprise as it is backed by a business having billions of dollars. However, only the time will tell who will eventually lead the music streaming race – Apple, Spotify or any new player.
At 9.35 am EST, Apple shares were up 1.22% at $98.19. Year to date, the stock is down over 6%, and in the last one-month, it is down over 13%.