Apple Music Hits 15 Million Subscribers And Becomes Ever More Important To Apple
Apple today announced a much anticipated refresh to Apple Music at its WWDC event. Apple Music has found itself at the centre of long running criticism from many parts due to its perceived product weaknesses. This is the bar against which Apple is measured. It has spent years building a well earned reputation for high quality products so its users understandably measure its services by the same standards. Apple Music was a highly ambitious version 1.0 that has since been iterated to iron out user journey kinks. Now today’s feature announcements look set to move Apple Music onto its next stage.
Being An Early Follower Requires Super High Standards
As an early follower rather than a leader Apple always sets itself the challenge of being measured against incumbents that have had years to refine their product offerings. With hardware, Apple normally meets and exceeds those standards. With Apple Music it launched a product that was light years ahead of where most of the incumbents were at launch, but that didn’t compare as favourably against their current offerings. Google Music Play All Access faced a similar challenge. The streaming music market has evolved so much since Spotify and Deezer’s inceptions that a music service cannot now afford to simply launch with the basics. It must do so much more.
Image courtesy of the Verge
The revamped Apple Music includes a new simplified white interface, lyrics integration and better interaction with cloud libraries (a long running bug bear). These are not exactly step change innovations but they are a significant move forward in what is proving to be a process of continual change. Ultimately this update is about making Apple Music more intuitive and for it to make more sense to mainstream users. Is all this enough to blow Spotify and Tidal out of the water? No, but add in Apple’s bottomless pockets for exclusives and marketing, and you have a potent mix.
Apple also announced a subscriber milestone, hitting 15 million subscribers. The number suggest that Apple’s growth is beginning to outpace that of its key challenger Spotify. Last year I suggested Apple would reach 20 million subscribers by the end of 2016. These numbers show it is well on track. Apple could yet be the leading music service by the end of 2017 if it starts to fully leverage all its ‘unfair advantages’.
Other metrics that Apple announced included:
- 130 billion App Store downloads
- 2 million apps available
- $50 billion paid out to developers
- 60 million Apple News users
10 Years On, Music Matters To Apple Once Again
Apple Music matters to Apple not because it will generate large profits (it won’t) but because it is the pace setter for Apple’s strategic shift towards being a services company. Apple is building a new narrative for Wall Street that focuses on the revenue it generates from its existing customer base (in order to distract attention from slowing device sales). Apple Music is the proof of concept. If it gets Apple Music right it will demonstrate its ability to deliver on best-in-class digital services. And because Apple still hasn’t been able to launch its TV subscription (it instead launched a partnership integration with Sling TV) it needs to get Music right until it is able to get the requisite TV deals in place.
This why the stakes are so high for Apple Music. Get it right, Apple re-establishes its market leadership role. Get it wrong, Apple’s own rescue plan goes down the pan. Music was so important to Apple in the mid 2000’s because it helped sell the iPod which in turn became the platform for growth that Apple trades upon today. Now 10 years on music has just reassumed its importance, this time to help sell Apple itself not just its hardware.
Security Officer at Tight Security Limited
8yu a killing me softily
Director of Business Development at Red Oak Compliance - Compliance Software
8yI love Spotify doubt i'll ever switch but its good to see that I have options in case Spotify somehow disappoints me.
Freelance Web Designer/MS Excel Developer
8y"With Apple Music it launched a product that was light years ahead of where most of the incumbents were at launch, but that didn’t compare as favourably against their current offerings." Mark, I'm not certain I understand this particular thought. From a UI and functionality perspective, Apple Music was a clunky, confusing mess upon launch (no-one who wrote about Music remotely considered it "light years ahead" of any of the streaming music incumbents). Hence the requirement for a down-to-the-studs overhaul of the UI less than one year following launch. In any event, Apple Music differs somewhat from Apple's usual come-from-behind-and-show-everyone-how-to-do-it-right approach. First, Apple Music was necessitated by the ascendance of the streaming music model which effectively obsoleted the buy-and-own library model originally conceived by Apple and resulting in the powerhouse media entity that we know today (and arguably launching the entire notion of the app store in later years). Apple is certainly coming from behind but, this time around, it's in an attempt to just get on the streaming music map. Unfortunately, they've produced a service that is yet another in a recent string of not particularly distinguished, not best-in-class, me-too efforts (which include less than stellar alumni, the Watch, iPad Pro, iPad Mini, Apple TV, and even the iPhone SE which is simply a regurgitated iPhone 5s with updated internals). As for market penetration, 15 million paying subscribers would be considered pretty decent on an absolute basis: if each subscriber pays on average $10 per month, that's $1.8 billion in annual revenue - not too shabby. On a relative basis, however, this represents about 0.75% of total Apple revenue. And Apple has in circulation approximately one billion devices in the hands of what we can politely consider to be a hyper-loyal customer base. Relative to that metric, 15 million subscribers in one year is almost certainly quite a bit less than Apple likely presumed that it would have by now (and we've seen the same less than impressive penetration numbers from classmates, the Watch, iPad Pro, and Apple TV). And compare Apple Music numbers to the rolling disaster that is Tidal which somehow garnered 3 million subscribers, nearly half of which were on the premium "HiFi" plan which would have generated revenue of a bit more than $0.5 billion. You'd expect a giant like Apple to have numbers that massively dwarf anything that Tidal could generate but that hasn't been the case. The thought of this article, is that Apple can somehow re-establish a leadership role in music on devices. This ignores the fact that even Apple fans are opening their eyes to the reality that other players can produce best-in-class products and services and, as such, price becomes a somewhat more interesting differentiator. Apple has in the past always considered itself above the price fray (hence the generally outrageous pricing of its products) and rightly so given the blind loyalty and easy spending habits of its customers. Today, it's much harder to argue that Apple products and services are worth a substantial (or any) premium over the competition. And indeed Apple Music is priced very similarly to market leader Spotify just to get the traction it has (which in relative terms isn't actually that impressive).