According to a new report, Google now has over 15 million subscribers on its streaming music platforms – Google Play Music (GPM) and YouTube Music.
Despite the great news for the Alphabet-owned company, here’s the kicker – subscriptions have abruptly stalled.
Growth in Google’s most critical division – YouTube – has all-but-flatlined. In fact, when pressed about coming $1 billion short of Wall Street’s revenue expectations last week, top executives blamed the video platform. Investors quickly punished the search giant over the weak earnings report, with Google’s shares plummeting 8.6%, its worst drop since 2012.
In a note summarizing the search giant’s poor quarterly results last week, Brian Nowak, an analyst at Morgan Stanley, wrote,
“What Happened[?] [Google’s] deceleration and uncertain forward trajectory highlight the need for better transparency.”
Underscoring the video platform’s inability to turn its massive 2 billion user base into paying subscribers, YouTube Music has only added 6 million subscriptions since its official launch last May. Google now has 16 million subscribers around the world.
Though Lucas Shaw wrote that the search giant is now “chasing Spotify,” the truth behind the search giant’s numbers is actually much less optimistic than the Bloomberg writer would have you believe.
Shaw wrote (with my own added emphasis),
“Google, part of Alphabet Inc., is still a long way from the market leaders: Spotify Technology SA has more than 100 million subscribers, while Apple Inc. has more than 50 million. But the progress is a good sign for an ad-supported company that has rarely gotten customers to pay for its services.”
But, it’s really not. Just take a look at the facts.
Between May 2018 and March 2019, Apple Music and Spotify added over 10 million and 20 million subscribers, respectively. Around the world, Amazon now has 30 million.
As the Wall Street Journal wrote,
“Google has struggled to convert users into paying customers, placing the company fourth in music subscriptions globally.”
Responding to the report, and refusing to elaborate, a Google spokeswoman merely dismissed the dismal subscription turnover rate as “inaccurate.” She added paid music subscriptions have grown 60% year-over-year.
But, when you start off with a ridiculously low number of subscriptions, and your video platform has over 2 billion monthly active users, 60% isn’t something to gloat about.
Plus, YouTube Music Premium and Premium remain available in 43 countries. So, even without doing the math, you can see the terrible position Google remains in. Excluding Spotify and Apple Music’s sizeable market lead, the search giant’s subscription total tally trails Amazon by nearly 50%.
Even worse for the company, between December 2018 and March 2019, sources told WSJ that Google’s music-subscription offerings had “stalled over the four-month period.” Meanwhile, the top three streaming music players showed “significant subscriber growth.”
Spinning YouTube Music’s recent launch in India, Google CEO Sundar Pichai claimed that local users had downloaded the app over 15 million times. Like Spotify, however, he remained quiet about the actual subscription numbers in the country.
Featured image by YouTube Music.