Apple Music Converts 6.5 Million to Paid Subscribers

CEO Tim Cook on Monday revealed that Apple had signed up 6.5 million customers willing to pay for its Apple Music streaming service. Another 8.5 million users currently are giving the service a look-see during a free three-month trial period.

Cook, speaking at a digital forum sponsored by The Wall Street Journal, unveiled the hard numbers of paid subscribers for the first time, as the industry waited to hear whether the unquestioned leader in consumer technology would be able to make inroads against rival Spotify, which thus far has taken the streaming music sector by the horns.

A Place in the Ecosystem

Apple needed to convert its new service into a sustainable vehicle using the content delivery tools that its customers have at their disposal, noted Gartner analyst Brian Blau, from the iTunes music service to the iPhone, iPad, Apple TV and Mac computers.

“This is a great start for Apple Music, and while it’s an important product for Apple, their strength lies in the ecosystem and their ability to attract customers that will buy into many other Apple devices and services, and the power of that ecosystem will ultimately drive the success of Apple Music,” he told the E-Commerce Times.

“While Apple entered the market much later than the competition, their unique relationship with customers through the iPhone means they have the ability to bring on subscribers using methods their competition can’t,” Blau pointed out. “Building up to 6.5 million subscribers in such a short period of time is meaningful, but they still need to convince music lovers to join and stay with the service for more than just the trial period.”

Apple Fans Only?

It appears that Apple’s customers are not responding to its music service with the same fervor the company’s other products tend to ignite.

“It is a decent conversion rate for a new service, but given the size of Apple’s customer base and historic loyalty, I’d have expected a higher number,” said Rob Enderle, principal analyst at the Enderle Group. “Within Apple’s base they can certainly challenge Spotify — outside of it, not so much.”

That said, Apple reportedly suffered a number of technical issues during the summer, he pointed out, which may have impacted customers’ willingness to sign up for a paid subscription.

Apple’s Objectives

Apple launched the music service this summer, offering three-month free trials in more than 100 countries. Users choosing to continue after the trial period has ended can subscribe for $9.99 per month. A family plan, which allows up to six users, is available for $14.99 per month.

Among the features that Apple brings to the table is a free 24-hour music radio service, Beats1, which is a progressive set curated by noted producer Zane Lowe and a cadre of top disc jockeys from around the world.

Spotify, which currently leads the streaming music space, has about 20 million paid subscribers — twice the number from a year earlier. It’s total user base of about 75 million active users compares with about 40 million a year earlier.

Spotify offers a free service and a premium version for $9.99. The premium version allows users to listen to music offline and is free of advertising. Users can play any track they choose. Spotify offers users a free 30-day trial of its premium service.

Other streaming music competitors include Pandora, Rhapsody and SoundCloud.

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

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