Recently this week, Daniel Ek, the founder and chief executive officer of Spotify, has enthusiastically tweeted that the music streaming service provider now has 40 million paying subscribers. Three weeks earlier, Billboard had reported that a high ranking executive from Spotify had revealed that the company had breached 39 million paying members, which is quite impressive considering that back in March early this year, Spotify had already reached 30 million paying subscribers.
Last week, most of the spotlight was focused on Apple and its highly awaited media event. Apart from formally unveiling its latest iPhone models (the iPhone 7 and the iPhone 7 Plus), Apple also took the opportunity to highlight new updates to its own music streaming service offering, Apple Music, which is considered by many as the biggest rival to Spotify. As of last week, Apple Music’s subscriber base has grown to 17 million strong, quite a significant improvement over the 13 million it registered back in April earlier this year.
For sure, Apple Music’s 17 million subscriber base is still a long way from catching up to Spotify’s 40 million, but it is hardly a surprise -- Spotify after all has been in the music streaming business far longer than Apple’s offering has. Still, the huge growth shown by both Spotify and Apple Music is a good indicator that consumers in general are indeed beginning to shift from purchasing music track by track to subscribing for a service that offers a whole catalogue of songs.
If this trend goes on, Spotify and Apple Music are looking to be the clear leaders in the industry. Interestingly, both are leaning on different approaches to strengthening their respective brands. Spotify boasts an advantage in terms of pricing by virtue of its unique free, ad supported tier (which other providers seem hesitant to adopt). As opposed to having its subscribers pay a monthly fee, Spotify tries to recover some its music streaming costs by putting ads in between songs. Also, the decision by the company to extend Family plans to six members, and in the process, reducing the costs to $15 may have also helped attract more new sign ups.
As for Apple Music, it has been quite aggressive in landing exclusive deals for hit albums, including Frank Ocean’s latest release, Blonde. Because of this, some reports are suggesting that Spotify is retaliating against recording stars who agree to exclusive arrangements elsewhere. Perhaps the more important question now is: will Spotify be able to fend off Apple Music’s rise? We will have to wait and see (or listen).
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