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Amazon Music Soars to 55 Million Listeners, Challenging Apple and Spotify

By Danny Vena - Jan 22, 2020 at 2:37PM

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Amazon just released updated subscription numbers and they suggest streaming music is no longer a two-horse race.

When you hear discussions about the competition in streaming music, the two most oft-mentioned rivals are Spotify (SPOT 9.28%) and Apple (AAPL 3.19%). Yet over the past couple of years, while the top two have battled for subscribers and headlines, another rival has quickly become a serious threat to the status quo -- Amazon (AMZN 5.73%).

The e-commerce giant has historically kept all of its subscriber numbers close to the vest. When it occasionally offers a peek behind the curtain, the details are often lacking. However, the company recently provided a rare metric regarding its subscribers, a number that clearly shows Amazon Music is becoming a threat to both Spotify and Apple.

Two women wearing earbuds and moving to the music.

Image source: Getty Images.

Quickly gaining ground

Amazon kicked off 2020 by announcing on Wednesday that its streaming music services -- Prime Music and Music Unlimited -- had together reached 55 million customers globally, across both its free and paid services. The company also said that subscriptions to its paid tier -- Amazon Music Unlimited -- grew by "more than 50% last year alone." The company said it achieved greater than 50% year-over-year growth in the U.S., U.K., Germany, and Japan, while saying growth more than doubled in France, Italy, Spain, and Mexico. Amazon also said it added an ad-supported tier in the U.S., U.K., and Germany.

In typical Amazon fashion, the company didn't provide specifics regarding how many paid subscribers it had, but research by analytics company MIDiA Research suggests that Amazon Music's paid subscribers numbered about 50 million, given that the free tier didn't debut until late 2019 and only launched in a few markets. 

The data suggests that Amazon Music's paid subscriber base grew by 16 million during 2019, which -- if correct -- would represent growth of 47% year over year -- consistent with the growth rates provided by Amazon. Early last year, the company reportedly had 32 million subscribers, saying at the time that those subscribing to Amazon Music Unlimited grew by 70% year over year. The growth trajectory would be consistent with previous data provided by Amazon Music VP Steve Boom, who said the company had "tens of millions" of listeners, and that Amazon Unlimited Music subscribers more than doubled between November 2017 and April 2018. 

Apples to oranges

It's difficult to put those numbers into perspective since we don't have current subscribers or growth rates from all three providers at the same time. That said, here's what we know.

Apple has been cagey about its subscriber base, only occasionally providing updates. The last confirmed figure we have was provided by Apple senior vice president Eddy Cue, who said that Apple Music had surpassed 60 million subscribers in June 2019, though the company has since been mum about its growth. 

Spotify is the only company of the three that provides regular updates to its subscriber numbers. This is largely because music is its primary business, which is not the case with Amazon or Apple. In its third-quarter financial results, Spotify said it ended the quarter with 113 million paid subscribers, up 31% year over year. The company also said it was available in 79 markets around the world. Spotify is due to report its fourth-quarter results on Wednesday, Feb. 5, before the market opens.

A woman with headphones looking at her phone and listening to music.

Image source: Getty Images.

A large and growing market

Streaming music remains a massive opportunity. Music revenue in the U.S. alone grew to $5.4 billion during the first half of 2019, up 18% year over year, while streaming revenue grew even faster, up 26% to $4.3 billion. Paid subscriptions topped 60 million for the first time, and streaming music accounted for 80% of industry revenue.

Amazon wants its share of the market, and the tech giant has both the heft and the resources to make it happen -- as evidenced by its continued strong growth in the space. Additionally, by introducing a free tier, Amazon is taking a page directly from Spotify's playbook, which uses its free, ad-supported service as a funnel to attract new, paid subscribers.

Now, in addition to worrying about each other, Spotify and Apple will need to keep a close eye on Amazon.

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