Apple Overtakes Spotify In US Subs
Last week Apple Music overtook Spotify in the number of subscribers it has in the US. Although neither company officially disclosures their US-only subscription totals, industry experts have calculated Apple with 28M compared with Spotify’s 26M. Spotify still has a sizeable lead in worldwide subs, and also has ad-supported trial listeners which Apple does not.
Apple Music surpassing Spotify creates an interesting business challenge for the Swedish streamer. For years Spotify has tried to walk the tight rope of having a robust base of ad-supported listeners which provides addressable audience scale it can leverage with advertisers, and also maintain a growing subscriber base. Now with Apple’s accelerating growth, Spotify may need to lean in with even more aggressive subscription offerings to compete. However, if they convert too many ad-supported listeners to subs they’ll be cannibalizing their own ad business. So it’s a tough spot to be in.
It’s also worth mentioning that no matter how aggressive Spotify gets with subscription offers, they can’t compete against Apple’s unlimited resources. As the US’s most profitable company with trillions in cash reserves, Apple can afford to use its music service as a loss leader until it drives Spotify into oblivion.