If this was writing on the wall before, it’s now a giant, pornographic mural on the largest billboard in town. According to research just published by Asymco analyst Horace Dediu, the average iTunes user now spends just $12 on music, a year, down from $42 five years ago.
Other categories like software and books are also declining, which makes sense given an iTunes registered user base that is ballooning towards 600 million worldwide. Sounds like that would naturally drive the average down, except for the inconvenient truth that apps are still increasing quite comfortably.
Which means: not only is there more stuff for ‘music fans’ to buy, they’re buying more of that other stuff.
Enter the streaming vanguard led by Spotify, which is now poised to surpass download revenues as early as this year. Here, the per-user riddle gets complicated: Spotify most recently reported 6 million paying subscribers, with 24 million total active users.
Assuming subscribers are all paying $120 a year (at the highest $10/month rate), that puts Spotify’s per-user spend at $30 a year, almost triple that of iTunes.
Except, there’s one gigantic problem here. According to research recently released by industry analyst Mark Mulligan, roughly 70 percent of Spotify registered users are completely inactive, abandoned accounts. Which makes the per-user numbers look something like this:
Spotify, revenue per user (per year).
Registered Users = Paying + Active + Inactive
Paying Subscribers (6 million): $120 a year
Active Users (24 million): $30 a year