Apple converting paying customers to Apple Music 2.5x faster than Spotify, says analyst

How to manage your Apple Music subscription
How to manage your Apple Music subscription (Image credit: iMore)

What you need to know

  • Apple is converting paying customers to Apple Music 2.5x faster than Spotify.
  • That's according to analyst Gene Munster.
  • He says that only 8% of iPhone users pay for the service, leaving plenty of room for growth.

Analyst Gene Munster says that according to Loup Ventures estimates, Apple is converting paying customers to Apple Music at 2.5x the rate of Spotify.

In his most recent reportMunster states:

Adjusting for addressable market (we estimate more than 95% of Apple Music subscribers are on iOS), our estimates indicate that Apple is converting potential customers into paying customers at a rate 2.5x faster than Spotify. We believe this faster conversion is driven by consumers valuing integrated experiences, which Apple's ownership of iOS provides. Separately, iOS owners have more disposable income than the average Android owner, which also plays into paid subscriber adds.

Munster made the remarks in the context of discussing Apple's rumored subscription service bundle the company may release later this year. Commenting on how iOS ownership impacts subscriber growth on Spotify and Apple Music, Munster notes that Apple Music is growing at 2.5x the rate of Spotify on iPhone because of its integration.

Munster says that only 8% of active iPhone users pay for the service, around 82 million people. This also shows that there is plenty of room for growth in the segment for Apple. It's important to remember that Apple does not share its Apple Music customer figures, so these are based on estimates and tidbits shared by Apple regarding various milestones:

In April 2020, Apple CFO Luca Maestri indicated paid subscriptions for Apple Music was "up strong double digits." In July 2020, Maestri said Apple Music experienced "strong double-digit growth." Based on December 2019 estimates from Counterpoint Research of 68m paid subscribers, Loup estimates Apple Music currently has about 82m paid subscribers.

Munster and Loup Ventures also estimate that the "average Apple Music subscriber" pays around $7 per month for the service (there are different price tiers), meaning it currently equates to around $6.8 billion a year in revenue for the company. You can read the full report here.

Stephen Warwick
News Editor

Stephen Warwick has written about Apple for five years at iMore and previously elsewhere. He covers all of iMore's latest breaking news regarding all of Apple's products and services, both hardware and software. Stephen has interviewed industry experts in a range of fields including finance, litigation, security, and more. He also specializes in curating and reviewing audio hardware and has experience beyond journalism in sound engineering, production, and design.

Before becoming a writer Stephen studied Ancient History at University and also worked at Apple for more than two years. Stephen is also a host on the iMore show, a weekly podcast recorded live that discusses the latest in breaking Apple news, as well as featuring fun trivia about all things Apple. Follow him on Twitter @stephenwarwick9