Streaming War: Apple Music vs. Spotify

Streaming War: Apple Music vs SpotifyThe Battle continues… who will end up on top?

For a period of time, Spotify dominated the music streaming market.  But, this was up until other streaming services entered the scene last year.  It was at this point that we saw the streaming wars begin.  Since then, these streaming services have been battling it out over which platform has the most subscribers, which service has the biggest catalog, which service has the latest album exclusive, and so on.

Spotify is still widely known as the ‘king’ of streaming services ,as it is one of the most well-established and currently has the most paid subscribers.  However, since Apple Music launched in June of last year, there’s been constant comparison between the two. Apple Music has experienced unprecedented growth and subscriber numbers have been accelerating.

So what sets them apart… and who is going to win the race to the top?

Price.

Spotify has two price tiers: a free ad-supported version and Spotify Premium which is $10 a month.  Apple Music doesn’t have a free tier, and its paid service is $9.99 per month.  So, there isn’t any difference in their paid options, but a giant gulf in pricing philosophies overall.

That said, Apple Music has a family option which outshines Spotify’s in terms of price.  Apple Music’s family plan costs $14.99 a month for up to 6 users, whereas Spotify’s family plan is priced significantly higher at $29.99 per month for up to 5 users.

Catalog.

Both streaming services boast more than 30 million songs in their library.  Though, there are some artists whose music does not exist on Spotify, which is largely due to the fact that the service has a freemium tier.  Artists have famously pulled their music from Spotify, as they believe that it devalues their music and that music fans should have to pay for the content that they create.

So, if you are a Taylor Swift fan or Thom Yorke’s Atoms for Peace, neither exists on Spotify, but they are both available to stream on Apple Music.  And that’s just the beginning: there are a number artists that you can find on Apple Music that are not on Spotify.

Apple Music has also been securing exclusives.  For example Drake’s latest hit ‘Hotline Bling’ was first streamed on Apple Music before becoming more widely available, and also DVSN — an up-and-coming band signed to Drake’s label — was also exclusively streamed on the service.

Radio.

Both Spotify and Apple Music have radio.  But this is where Apple Music has the upper hand on Spotify, as it has the integration of Beats 1 — a 24-hour, live radio station with known DJs.  Beats 1 has in-house DJs like Zane Lowe, adding a more unique experience for listeners than just simply having a system that generates music.

Music discovery.

Spotify has extensive playlists that are continuously updated, which makes discovery easy.  That includes ‘Discover Weekly,’ updated every Monday with a two-hour personalized playlist, and ‘Fresh Finds,’ which includes 6 new genre-specific playlists updated every Wednesday.

Apple Music also has their own way of creating unique playlists for their users.  Apple Music uses Beats to learn their users’ music tastes and preferences.  The engine learns the user’s likes and dislikes, and suggests new music based upon the music they choose to listen to when using the app.

There’s also a ‘For You’ tab that populates new music of interest.  Apple Music doesn’t use an algorithm for this, it uses real humans to curate the playlists (also a philosophical difference).

Subscription Growth.

Spotify’s growth.

Spotify Launched in 2008. The streaming service announced that it hit 10 million paid subscribers (40 million active users) on May 21st, 2014.  It then jumped to 20 million paid users (75 million active users) by June 10th, 2015.  The streaming platform announced that it reached 30 million paid subscribers (100 million active users) on March 21st, 2016.
It took Spotify from 2008 to 2014 (6 years) to hit 10 million paying subscribers.  But, once Spotify hit 10 million, subscriber growth picked up momentum and the streaming service managed to gain an extra 10 million subscribers in just over one year, hitting 20 million paid subscribers in 2015.
It then took Spotify approximately 9 months to gain an extra 10 million, an addition of over 1 million paying users per month during 2015 and 2016.  This highlights that the rate at which the streaming platform is adding paying subscribers is accelerating year-on-year.

Apple Music’s growth.

Apple music launched on June 30th, 2015.  The streaming platform announced hitting 6.5 million subscribers on October 20th, 2015.  It then jumped to 10 million subscribers by January 10th, 2016, and the streaming platform most recently announced that they hit 13 million subscribers on April 26th, 2016.

But the rate of growth is what’s important.  It took Apple Music just 6 short months to hit 10 million paying subscribers,  a milestone that took Spotify 6 years to reach.  This means that Apple Music gained over 1.6 million users on average per month in the first six months from launch.  Now, the streaming platform is experiencing steady growth with the addition of approximately 1 million subscribers a month.
If both streaming services continue to add an extra one million subscribers on average each month, we will see Apple Music surpassing 20 million subscribers by the end of the year, and Spotify nearly reaching double that amount at nearly 40 million subscribers by the end of 2016.

Verdict.

Both streaming services offer great value for the money.  They are both priced the same, have similarly-sized catalogs (though their content does vary), and both streaming services offer great music discovery for their users.  In terms of radio, Apple Music is currently a clear winner, though Spotify’s radio is also good.

If you are a family who are all using different streaming services, you may want to consider Apple Music’s family plan as it offers the best value in the streaming service market.  Both streaming services are also growing significantly in terms of subscriber numbers, and both platforms have stepped up their game to better compete.

Despite the fact that Spotify has been established for longer, they are more heavily reliant on funding, whereas Apple has an abundance of cash that it can inject into its streaming service at any time it wants to expand.  Spotify recently needed to raise $1 billion in debt financing, which will inevitably put pressure on the company, as it often results in high-interest monthly payments.

It will be interesting to see if Apple Music’s subscriber growth accelerates to the point where it is on the same level as Spotify’s.  This could be a neck-and-neck horserace sooner than we think.

 

 

(Image by Toglenn, Creative Commons, Attribution-Share Alike 3.0 Unported, cc by-sa 3.0)

15 Responses

  1. Remi Swierczek

    Two DUMBBELLS on Ek’s DOPE shrinking $200B music goodwill to $15B of subs!

    Thank you UMG for listing to Napster boys, then convincing Apple boys to execute your own SUICIDE.

    Income limit of this FARCE will create $20B ad and sub based global music business hopefully by 2025.

    McDonald burgers did $25.41 last year!

    HAVE SOME HONOR label boy and girls!

    Reply
    • Remi Swierczek

      By the way McDonald in Discovery Moment Monetization mode can become $500 million dollar music store!
      Enjoy music as you eat shit and pay for addition to the playlist.

      Reply
      • Remi Swierczek

        McDonald with few savvy DJs can become label cashing on global success of new discoveries!

        Reply
  2. Nicky Knight

    For me the winner is Apple Music – and that’s from an independent label’s perspective.

    We have a direct content provider agreement with Apple for iTunes and Apple Music and it works brilliantly.

    If we want to get on Spotify we have to go via an Aggregator (which we’ve done in the past). Now that’s not a huge deal .. but unless you have a billion streams then Spotify is still peanuts compared to earnings from Apple iTunes and Apple Music.

    That’s our experience so far..

    Reply
    • Versus

      Are you saying Apple Music’s payout rate per stream is higher than Scamify’s?

      Reply
  3. Uju

    I’m sorry but this post seems to be more than slightly biased towards Apple music, pointing out area’s where it has the upper hand on Spotify but failing to acknowledge any of Spotify’s advantages over Apple music, but paints the clear superiority as just “a difference”. Spotify was, is, the first of it’s kind, and apple, as usual, took an idea that they saw succeeded with other’s and appropriated it. Please mention that next time you decide to put compare Spotify to any other sub-par streaming service.
    thanks 🙂

    Reply
    • Charlotte Hassan
      Charlotte Hassan

      The point that the piece makes is…
      Spotify dominated the streaming market for a long time.
      Apple Music entered…
      Apple Music’s growth accelerates….
      Both streaming services are on par with each other in terms of price, catalog size.
      But, there is a gap in Spotify’s catalog due to its free tier… but despite this it is still way ahead of apple music…
      who will outgrow who?

      Its not a spotify-bashing piece by any means.

      Reply
      • Gary P

        I didn’t think it was Spotify bashing but it is a bit ahh unfair to compare Spotify’s initial growth in 2008 with Apple’s in 2015.. Vastly different era. In 2008 iPods ruled the music world so streaming was not very common.. now that smart phones rule the world streaming is much more common.. otherwise I like the comparisons..

        Reply
        • Chris G

          The article is good and I don’t think it’s a Spotify bashing piece at all, although most of the articles that I have read here are slightly biased against Spotify. I agree with Gary P. These are 2 vastly different eras. Apple rolled out it’s streaming product last June essentially validating what Spotify has been doing for years (it’s only made Spotify stronger) and I think that Apple Music did exactly as expected given that they gave a free 3 month trial that automatically charged your credit card at the end of the trial unless cancelled. Apple has 800 million credit cards on file. Spotify’s initial growth is not comparable at all to Apple’s initial growth. Spotify was founded in 2006, launched in Europe in 2008 and was not launched in the US until 2011 and is still in only about 60 countries and growing fast. Apple was immediately in 120 countries. That said, Spotify’s growth is more comparable to NFLX’s growth which is outstanding. It actually may have outpaced NFLX from an initial growth stand point for the first 5+ years. Spotify has been more innovative and faster to market than Apple but what is undeniable is Apple’s financial situation…Spotify is taking on huge risk with these debt deals but I think it will pay off in a big way down the road. Apple is also lacking innovation (i.e. wrist watches and radio stations but I do like this original video content idea with Vice. Who will have the first House of Cards). I think both of these companies are going to be very successful in this space but I think it is more of a Coke and Pepsi situation. I like both but I enjoy Coke much more. It doesn’t really have to be one or the other. I have both services I just use Spotify way more.

          Reply
      • Remi Swierczek

        Please do not call it “MARKET” – music FURNACE is appropriate term!

        I CAN NOT sleep at night observing this NERD LAND on
        UMG leash to MASS SUICIDE!

        Please tell me who besides Google and
        MOONSHOT seeker Larry Page can extinguish my anxiety!!!!!!

        Reply
      • Remi Swierczek

        Please do not call it a “MARKET” – music FURNACE is more appropriate term!

        I CAN NOT sleep at night observing this NERD LAND on
        UMG leash to MASS SUICIDE!

        Please tell me know, who besides Google and
        MOONSHOT seeker Larry Page can extinguish my anxiety!!!!!!

        Reply
  4. radio free california

    It’s interesting that there’s a comment where it alludes that the article is bashing Spotify and favors Apple.. I often find it’s the other way round.. too many people get pleasure knocking Apple in any which way they can..

    Apple is very much a music company.. they make the most brilliant software with Logic Pro and Garageband, iTunes is still the world leader for digital music downloads and Apple Music is becoming a hit streamer..

    One comment said “Apple is also lacking innovation…” just looking at all of the hardware, software and digital delivery platforms I have to disagree with the view of that author.

    The MacBook Pro with Logic Pro is basically a complete software driven digital music recording studio..

    Of course there’s a lot of competitiveness and jealously in the business and sometimes you have to see beyond the lines..

    Reply
    • Anon

      Or Google…

      Makes so much sense that I’d love to know why it hasn’t happened yet

      Reply

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