When October 1st arrived, those earliest of adopters who signed up for Apple Music on day one saw their first credit card charge for the service. There’d been much speculation as to how many people would switch from a three-month trial subscription to a recurring, monthly, paid subscription of Apple Music. According to Tim Cook, Apple Music has 15 million users and 6.5 million paying subscribers. But what do those numbers actually mean?
There are three types of subscribers:
- People who decided that they do, indeed, want to spend $10 (or whatever the cost is in their country) for Apple Music.
- People who signed up for a $15 family plan, in which case there are anywhere from 2 to 6 users per account.
- People who had simply forgotten to cancel their subscription. When you signed up for a trial, you had to provide a credit card number. If you didn’t cancel in time, you would be billed, at least for the first month.
It’s safe to assume that when Tim Cook talks about a number of “paying subscribers” he doesn’t mean paid accounts. The family plan is a very good deal $15, so it’s likely that a couple of million people represent family plan users. If you lop off the people who forgot to cancel their subscription and got billed for the first month, even though they don’t use the service, it’s probably safe to assume that there are between three and 4 million accounts.
This is not a bad number at all. Compare this to Spotify, whose latest numbers claim “over 20 million” subscribers, this for “over 75 million” active users. But Spotify has been around for much longer, especially in Europe. The company has slowly built up its subscriber base.
For Apple to have amassed 3 to 4 million paid accounts in just a few months is no mean feat. However, given Apple’s objectives, and the way that Apple Music is baked into iOS 9 and iTunes, I think the company expected more. Especially that Apple Music has only 15 million total users (8.5 million still on trials). Compared to the total number of iOS users – a few hundred million – that’s a drop in the bucket.
I think this sector bases its predictions, and objectives, on erroneous assumptions: that people are willing to pay this much money per month to stream music. When casual listeners can get the same music for free from YouTube, or an ad-supported streaming service such as Spotify, or even the radio, they’re unlikely to want to spend $10 a month. Don’t get me wrong; Apple Music, with 30 million tracks, is an immense music library. It is certainly a good deal at that price, but if you are not a big music fan, you simply won’t spend that money. And if you are serious music lover, you may find that you don’t get your money’s worth because you already own so much music that you listen to regularly.
I think it is going to be an uphill battle for Apple. While the company dominated in music sales for a very long time with the iTunes Store, they are entering a crowded field of music streaming services. In addition, the $10 price point seems to be a bit high for those people who only use music as wallpaper. What would it take: lowering the monthly price to $5? Perhaps many more people would sign up at that price, and not worry too much if they don’t use the service a lot. (That is more or less what Apple Music costs per person on the family plan.)
If Apple really has a target of 100 million subscribers, I think it will take a long time to reach that number. Apple Music, with its confusing interface, is hard to use, and doesn’t invite engagement. To achieve such high numbers, I think Apple needs to lower its price, and improve the interface of the Music app, and of iTunes. Again, Apple Music at $5 a month would be a great deal, but it wouldn’t result in the same payouts to record labels. We’ll know more after a few months, after more people have ended their trials, but, for now, I’d say the numbers aren’t brilliant.