Apple Music is rapidly advancing against Spotify in the field of paid subscribers, not least because of its marketing number in captivity, according to an analysts' memo that was shared with AppleInsider on Tuesday.
"Adjustment for addressable market … Apple converts potential customers 2.5x faster to paying customers than Spotify," writes Gene Munster, analyst at Loup Ventures. In North America, where Apple CEO Tim Cook recently claimed to have caught up with Spotify in paid customers, Munster estimates that Apple Music has 21 million subscribers against 20 million Spotify.
The analyst suggests that although Apple's conversion rate can be partly attributed to iPhone owners with more disposable income, the larger factor is Apple's control over iOS – which not only offers a "seamlessly integrated music experience", but built-in advertising that people try convince you to subscribe. The company has so far denied the integration of third party streaming services into iOS and Siri, and although Spotify may be popular, iPhone owners need to actively look it up.
Apple Music has "room to grow", with 45 million worldwide subscribers of about 780 million active iPhone users, says Munster. Spotify is still said to dominate the global music streaming market, although its share has dropped from 65 to 62 percent year-on-year. Apple has grown from 30 to 34, while Pandora has decreased from 6 percent to 4.
Spotify would have at least one advantage, namely that it works well on both iOS and Android devices. Although Apple Music is technically available for Android, Munster estimates that 95 percent of subscribers work on iOS. Many of the reasons to use the service disappear on Android, such as Siri voice commands or HomePod compatibility.
Not mentioned by Munster is the fact that Spotify, in contrast to Apple, has a free ad-supported layer next to the registrations. Although free listeners generate less money, they can continue to work after each trial period and eventually sign up if they have the money for monthly costs. Spotify has 180 million or more listeners worldwide, including 83 million Premium subscribers.