Apple Music Now Has 56 Million Subscribers
Apple Music has adopted an “aggressive” strategy to take on Spotify. Looks like it’s working.
Over the summer, Apple CEO Tim Cook confirmed that the company’s streaming music service had reached a new milestone.
In addition to hitting 50 million paid subscriptions, Apple Music overtook Spotify in three key markets – the US, Canada, and Japan. That is, according to Cook.
Thanks to bundling on iOS devices, the company converts paying customers nearly 3 times faster than its rival.
Over the past year, Spotify has had a stable conversion rate of around 0.24%. Apple Music has 0.64%.
Now, the company has posted a new subscription milestone.
To take on the streaming music giant, Tim Cook has adopted a new strategy. According to the Financial Times, Apple Music now aims to gain subscribers from terrestrial radio.
FT adds that the service would’ve dominated the streaming music market long ago. Unfortunately, Apple executives fumbled the launch.
An unnamed senior major label executive explained,
“Apple stumbled out of the gate with an inferior product three years ago. Apple Music did not become this spectacular product like iTunes was.”
The company has apparently learned from its mistake. According to the same executive, Apple has “become more aggressive.”
“They’re getting more serious . . . they’re coming to us with new ideas all the time that they wouldn’t have done two years ago.”
Part of “getting more serious” includes changing the service’s top executives.
Under Jimmy Iovine, Apple Music paid artists millions for exclusive releases. Following Iovine’s departure, however, the company quickly brought in Oliver Schusser to serve as Head of Music. He previously worked at Apple’s office in London.
Under Schusser, the service has quietly added a global publishing business. It’s also unveiled global music charts. In addition, the company has hired Brian Bumbery, a veteran music publicist, to serve as Head of Publicity.
Speaking about the new hires, another major label executive added,
“There’s definitely a changing of the guard.”
In fact, as part of this shift in strategy, the company has started reaching out to other rivals. Next month, for example, Amazon Echo will provide support for Apple Music. The Cupertino company already has its own luxury smart speaker which has underperformed – the HomePod.
Recently, the Financial Times reported on another major move by Apple.
The company has reportedly explored making a sizable equity investment in iHeartMedia. This, wrote FT, would help the Cupertino company beef up its floundering Beats 1 Radio service.
Speaking about Apple’s possible equity investment in iHeartMedia, Midia Research analyst Mark Mulligan explained,
“You have to know how to program, build personalities, and brands. Apple is still on that journey [with Beats 1], and [iHeartMedia] would give them industry IQ on that.”
Another option Apple has considered is outright purchasing iHeartRadio’s streaming platform.
This would serve as a “relatively cheap way” to reach the service’s 120 million registered users.
Spotify hasn’t yet considered going after broadcast radio listeners, explained another major music label executive. That could ultimately tip the global streaming music market in Apple’s favor.
“Terrestrial radio is not the force it once was, but there are millions of people listening to the radio. These radio listeners will inevitably migrate to online services, and they could be herded towards Apple.”
Yet, the Cupertino company’s move to reach out on terrestrial radio comes during a difficult time for its stock.
Following weakening iPhone sales, investors have turned against the company. In addition, the Supreme Court may rule against Apple in an important monopoly class-action lawsuit. This would significantly impact Tim Cook’s vision for Apple to hit $50 billion in revenue from its online services, primarily the App Store, next year.
Nevertheless, Apple will always have one major advantage over Spotify. The company doesn’t need streaming to remain profitable.
As Tim Cook explained in an interview earlier this year,
“[We’re] not in it for the money.”