Apple Inc. (AAPL) is horning in on Spotify’s (SPOT) lead in the music-streaming business. Spotify is still the dominant player globally, but Apple’s growth rate is faster than Spotify's in the U.S., the world’s largest market for music.
Apple Music had from 21 million to 21.5 million subscribers in the U.S. as of last week, while Spotify had between 22 million to 22.5 million, according to unnamed executive sources cited by the Financial Times. Last year, Apple had 13 million U.S. subscribers compared to Spotify’s 17 million subscribers. The sources expect Apple to match Sportify’s U.S. subscriber numbers by next month as it successfully drives iPhone users to its other services.
Apple recently demonstrated its edge over Spotify as musician Drake released his new album "Scorpion," which is expected to be the biggest album of the year. In the first 24 hours of release, "Scorpion" streamed on Apple Music 170 million times and 130 million times on Spotify.
Apple is likely to draw about U.S. 27 million users by the end of the year, with Spotify expected to have 24 million. In other markets like Canada and the U.K., Apple is also making faster strides with its subscription growth rate.
Global Music-Streaming Market
Spotify has said it had 75 million subscribers at the end of March and expected to see 100 million by the end of this year. Apple said it reached a milestone 50 million subscribers in May (See also: Apple Music Creeps Up on Spotify.)
“Spotify has always targeted music lovers, who tend to be a bit younger and were early adopters of streaming,” said Mark Mulligan, analyst at Midia Research. “A lot of that base has been soaked up now, whereas Apple has a much wider customer base. They can get those more mainstream people very easily because [Apple Music] is already in their phone, and they already have their credit card info.”