In February, The Wall Street Journal predicted that Apple (AAPL 0.85%) could overtake Spotify (SPOT +0.40%) in paid U.S. subscribers as soon as this summer, based on the trajectories of each music-streaming service's respective user bases. Apple Music had an estimated 36 million paid subscribers globally at that time. In the months since, Apple Music hit 40 million paid subscribers, and Spotify successfully went public via a direct listing, disclosing to investors for the first time details regarding its user base.
Apple Music may have just fulfilled that prediction, right on schedule.
Image source: Getty Images.
Apple ahead by "a hair"
Digital Music News reports that Apple Music has just surpassed Spotify in the U.S., citing an anonymous source from a "major distributor" based in the U.S. Each service now has just over 20 million paid subscribers in the U.S., according to the report, with the Mac maker "now a hair ahead." Globally, Apple Music reportedly now has over 45 million paid subscribers.
Trial users were not included in the figures. Apple CEO Tim Cook said in May that Apple Music had hit 50 million users globally when including trial users.
Spotify provided geographical breakdown of its total monthly active user (MAU) base as of the end of 2017 in its prospectus.
|
Geographical Market |
Percentage of MAUs |
MAUs |
|---|---|---|
|
Europe |
37% |
58 million |
|
North America |
32% |
51 million |
|
Latin America |
21% |
33 million |
|
Rest of world |
10% |
16 million |
Data source: SEC filings. Figures as of end of 2017.
At the end of the first quarter, Spotify had 170 million MAUs, including 75 million premium subscribers, meaning nearly 45% of users on average are premium subscribers. If the company's user base composition in North America reflects that average, that would suggest it has 22.5 million premium subscribers in that region, which also includes Canada.
The U.S. is over a fifth of the global market for paid music subscriptions
If accurate, that would be a huge win for Apple, as the U.S. is an extremely important market for music streaming.
The Recording Industry Association of America (RIAA) estimates that there was an average of 35.3 million paid music subscriptions in the U.S. in 2017. That one market would represent a fifth of the world's 176 million paid music subscriptions, according to IFPI estimates. The RIAA estimate is an average for the year though, so the number of paid subscriptions in the U.S. at year's end is actually higher. (Spotify and Apple Music combined would be over 40 million, per the Digital Music News data.)
Investors will get an update on Spotify's user metrics when the Swedish company reports second-quarter results on July 26. Apple reports a few days later on July 31, although it does not regularly disclose Apple Music metrics in earnings releases.
