The MBW Review offers our take on some of the music biz’s biggest recent goings-on. This time, we decipher comments from Apple’s global boss to calculate how many subscribers Apple Music has racked up in the biggest market of all. The MBW Review is supported by Instrumental.
Apple CEO Tim Cook didn’t give too much away about the progress of Apple Music during the Cupertino giant’s latest earnings call yesterday.
Commenting on Apple’s Q2 results, Cook mentioned that Apple Music now has “well over 50 million listeners” across paying users and free triallsts – a stat he first revealed back in May.
Elsewhere, Cook mentioned that Apple Music’s revenues grew over 50% year-on-year in Q2 (the three months to end of June).
This, too, was less than a surprise: Apple’s global paying subscriber base actually grew over 60% from June 2017 (27m) to June 2018 (44m+).
In fact, in terms of newsworthiness, one thing Cook said yesterday really stood out:
“It appears to us… that we took the leadership position in North America during the quarter and we have the leadership position in Japan, [as well as] in some of the markets that we’ve been in for a long period of time.”
And it’s here we start to wonder if Mr Cook, or one of his team, might just have happened to notice something on MBW last week…
Following Spotify’s Q2 results last Thursday (July 26), as part of an in-depth MBW analysis, we calculated a number that’s been staring us in the face for some time.
In its quarterly report, Spotify gave away its Q2 global paying user count (83m at end of June) and its total active user count (180m) – but it also revealed some key information about where these subscribers/users are located.
In Q2, here’s how that looked:
Using this percentage information, we could make a solid attempt at working out how many of Spotify’s 83m subscribers were based in different regions of the world at the end of June 2018.
Here’s what that solid attempt looked like:
Back to Tim Cook, and the really important quote from yesterday: “It appears to us… that we took the leadership position in North America during the quarter.”
ie. We overtook Spotify in terms of subscribers when you combine the US and Canada before the end of June.
For that to be true, as you can see above, Apple Music would have had to surpass 25.7m (more likely, 26m) subscribers in these regions before the end of the quarter. (Likewise, Apple Music and Spotify would have had to have counted over 51m subscribers in North America between them.)
Now, judging by its recent growth curve (see below) you’d expect Apple’s global paying subs base in June to have sat somewhere between 44m – 46m.
With that in mind, it looks certain that more than 50% of Apple’s paying user base in June this year were located in North America.
(Indeed, this has to be true – unless Apple piled on an unprecedented 10m additional subscribers in two months, after announcing 40m paying subs in April.)
Contrast that with Spotify, which counted just 31% of its global subscribers in North America in the same period, with 40% in Europe and 20% in Latin America.
And then read this final quote from Tim Cook yesterday, and understand why the ambition for Apple Music’s next flurry of growth will surely come outside the States.
“The key thing in music is not the competition between companies that are providing music [ie. Apple Music and Spotify]. The real challenge is to grow the market, because if you add everyone up that’s providing subscription music today or streaming music, outside of China, it’s less than 200 million probably around the world.
“The real challenge is to grow the [global music streaming] market, because if you add every [subscriber up], outside of China, it’s less than 200 million probably around the world.”
“There is an extraordinary opportunity in [the music streaming] business to grow the market well, and I think if we put our emphasis there, which we’re doing, [we] will be a beneficiary of that as other people will as well.”
Apple Music is available in over 110 countries worldwide, while Spotify is available in 65, having expanded into South Africa, Israel, Vietnam and Romania in March.
Spotify is very keen to further expand into India in the coming months – but its path might be blocked by labels, who have to credit it the territorial licenses required to do so.
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