Loup Ventures predict Apple Music’s 82m subscribers will generate $6.8bn revenue in 2020

Investment firm Loup Ventures published a report detailing Apple Music’s subscriber numbers, market share and revenue for 2020.

The report suggests Apple Music’s 82 million paying subscribers equates to $6.8 billion, which makes up around 2.5% of the companies overall revenue.

Loup Venture claims Spotify currently hold around 34% of the global share, compared to Apple Music which sits at around 20%. This roughly lines up with prediction from MIDiA and Counterpoint Research on the share of subscribers for Q1 2020, which estimate 32% compared to 18% and 30% compared to 25% repectively for Spotify and Apple Music.

Spotify vs. Apple Music

The takeaways from the report indicate:

  • 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.
  • Apple Music has room to grow with 82m subs out of 980m active iPhone users (8%) paying for the service.
  • We estimate the average Apple Music subscriber is paying about $7.00 per month, which equates to about $6.8B in revenue this year, or 2.5% of total revenue.
  • While Apple Music is growing paid subs faster than Spotify, the overall market share between the two companies has remained stable over the last two years. We currently estimate Spotify has 34% global share compared to 20% for Apple. We estimate market shares for the two companies were 35% and 18% respectively in 2018.
  • Notably, the global music streaming market as a whole has become more competitive in the last two years with the rise of Amazon Music, YouTube Music, Tencent Music, and multiple other offerings with fractional market share.

Apple are expected to launch Apple One in October, bundling Apple Music, Apple TV+, Apple Arcade, Apple News+ and iCloud.

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