2012 marked the height of digital music downloads in the United States. Download sales reached $2.9 billion, according to the RIAA. Streaming subscriptions like Spotify (NYSE:SPOT), meanwhile, were still in their infancy, raking in a mere $400 million in 2012.

Apple (NASDAQ:AAPL) was the dominant force in digital downloads, accounting for 63% of digital sales in 2012, according to the NPD Group. That put Apple's digital downloads at around 26% of all music sales in the U.S. in 2012.

Fast-forward to 2019, and the music sales landscape is completely different. Sales are on the upswing thanks to the rise of streaming services. Subscriptions accounted for 47.3% of all revenue in the U.S. Meanwhile, digital downloads make up 10.1% of sales. Given Apple's relative market shares of each, the company's share of the overall music industry has remained roughly flat over the last six years.

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Apple Music interface shown on a Macbook, iPad, iPhone, Apple Watch, and an Apple TV.

Image source: Apple.

Making up for lost time

Apple was late to enter the streaming-music market, but since launching in mid-2015 (three years after the peak of digital downloads), it's managed to overtake Spotify for the market lead in the United States.

Apple says it now has over 50 million subscribers globally, which is well behind Spotify's 96 million premium subscribers. But Apple's user base is more concentrated in the United States, where it has a greater share of the smartphone market compared to the rest of the world. For reference, Spotify has around 29 million subscribers in North America.

There's no doubt that without Apple Music, Apple's share of the music industry would've become a small footnote in the company's earnings reports. But in the company's fourth-quarter earnings call, CEO Tim Cook called it out. "We generated our highest quarterly music revenue ever thanks to the great popularity of Apple Music," he told analysts.

Combining Apple Music's share of streaming and iTunes downloads' share of digital downloads, the company's market share is still around the same mid-20% level it was six years ago at peak download. It might even be higher. And with the growth of the industry stemming from streaming, Apple's market share is set to climb higher still.

Why Apple's music market share matters

It's all well and good that Apple's been able to maneuver its way through the transition to streaming music from digital downloads, but music is a relatively small part of the tech titan's business. Apple's revenue in calendar 2018 was $261.6 billion. The entire U.S. music industry generated just $9.8 billion.

But Apple is building out an ecosystem of services, and music will be a central part of that business. Later this month, the company is expected to introduce a video-streaming service and a news subscription service. Analysts are expecting Apple to offer some sort of bundle, which could rely on its music services, to increase subscription revenue.

Apple needs to leverage its position in music to sell other media.

The media bundle becomes even more important in light of Apple's shifting focus toward services. And the pressure is on Apple to grow sales of media specifically, as it can't continue to rely on traffic acquisition costs to drive services revenue growth indefinitely.

Apple's success in maintaining -- and perhaps growing -- its market share of the U.S. music industry puts it in a good position to launch a broader media business.

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