Apple Music has been relatively successful since it launched last year, especially when one takes into account that it is now one of the top music streaming services in the world, with 15 million paying subscribers. Despite their rapid growth in a year's time, it appears as if their growth has stagnated over time, hampering the service's ability to catch up with Spotify, its biggest competitor. Well, it appears that two analysts have found out the reason why Apple's growth has slowed as of recent.
Two analysts, John Blackledge and Tim Acuri found that Apple Music's subscriber "churn rate," or users that fail to remain on the service as paid subscribers the following month, is 6.4 percent. This churn rate is nearly triple that of Spotify, which means that even if Apple Music were to bring on the same amount of subscribers as Spotify, they would retain just a quarter of the users that Spotify does. This renders Apple Music's fight against Spotify for the music streaming crown an uphill battle.
Recently, we posted an article about Apple potentially looking to acquire Tidal, which has just four million paying users. While adding four million subscribers to their 15 million subscribers would be an added bonus, one of the main reasons Apple may be looking to acquire Tidal is the service's exclusives. Some of the biggest releases of the year, Beyonce's Lemonade, Rihanna's ANTI, and Kanye West's The Life of Pablo, were all initially Tidal exclusives, making it virtually impossible to listen to those albums without a Tidal subscription.
The power of exclusives is that it may give users more of an incentive to remain a subscriber on the service. For the users to remain incentivized to pay for a service's exclusives though, there has to be a constant stream of material, not just one every couple of months. Apple adding Tidal's exclusive artists to its catalog of exclusive artists, which include Taylor Swift, Drake, and Pharrell Williams, will ideally help reduce its churn rate, and help them in the race to music streaming supremacy.
It should be noted that the aforementioned analysts, John Blackledge and Tim Acuri, mentioned that almost all new subscription businesses experience high churn rates in their first year of operation. It remains to be seen if Apple will be able to catch up with Spotify in the music streaming race.