December 7, 2016:Apple Music reaches 20m subscribers, adding 1m a month

You may spy mischief in the announcement of a significant Apple Music milestone on the same day that Pandora unveiled its new on-demand subscription tier, which will be a direct rival in 2017.

But there are plenty of other reasons to be interested in Apple Music reaching 20 million paid subscribers 17 months after the streaming service launched.

The new milestone comes three months after Apple Music passed 17 million subscribers, meaning that it’s adding a million new subscribers a month.

That’s an acceleration: in September we calculated that Apple Music had been averaging 857k new subscribers a month in 2016. Spotify, meanwhile, was adding around 1.7 million new subscribers a month in the run-up to its September milestone of 40 million subs.

2016’s streaming story isn’t just about Spotify and Apple Music’s competition: Amazon’s dark-horse status, Deezer’s quiet growth and Rhapsody managing to turn a quarterly profit are all part of the picture too.

Even so, Spotify and Apple Music combined have added at least 22 million subscribers in 2016, after the music industry ended 2015 (according to the IFPI) with 68 million people paying for a music subscription.

This morning, we happened across a Business Insider headline from July 2015 – “Apple Music will make Spotify totally irrelevant within a year” – which made us chuckle. The truth appears to be that these two services have made paying for music relevant (and desirable) again, with assistance from smaller rivals.

Apple is enjoying the fruits of this growth too: the company recently said its music revenue was up 22% in the third quarter thanks to Apple Music, with services a bright spot for the company amid declining hardware sales.

Some more points of interest from an Eddy Cue Billboard interview last night: 60% of Apple Music users have not bought downloads from the iTunes store in the last year – “the vast majority are new customers” rather than iTunes ditchers claimed Cue.

Apple also says that more than 50% of Apple Music subscribers are outside the US – which of course suggests nearly 10 million of them are inside it.

A final note: alongside its Apple Music announcement, Apple released its annual lists of the most popular and top-grossing apps for iOS around the world.

In the US, Spotify was the fourth top-grossing iOS app this year and Pandora the eighth – they plus tenth-ranked HBO Now were the only non-games in the top 10. In the UK, Spotify was the top grossing iOS app, beating even Pokémon Go and Candy Crush Saga, while in France Deezer was fourth.

It’s a reminder of how important music is for Apple’s customers, but also of how important its app platform is for the growth of Apple Music’s rivals.

Stuart Dredge
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