Who Are Apple’s Competitors in the Music Streaming Segment?



Amazon’s service expected to cost $9.99 per month

Earlier this month, Amazon (AMZN) announced that it was looking to launch its standalone music streaming service. Amazon stated that it was finalizing content licenses and expected to provide the service at $9.99 per month. This service will be independent of Amazon’s Prime service, which has approximately one million songs.

In comparison, Apple Music and Spotify each have collections of 30 million songs.

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Other companies in the music streaming segment

In March 2016, Fortune reported that SoundCloud was another entrant into the paid subscription–based music streaming market. SoundCloud’s Go service, priced at $9.99 per month, will provide “amateur remixes, but also the artists’ official recordings,” similar to Spotify and Apple Music.

Pandora Media (P) has a music subscription service called Pandora One, which is priced at around $5 per month. Pandora already has a 10% market share in the United States (SPY).

According to the RIAA’s (Recording Industry Association of America) shipment and revenue statistics, streaming services made up 34.3% of total revenue in the US recording industry in 2015. As the above chart shows, paid subscription–based music streaming contributed $1.2 billion to total music streaming revenue in the United States in 2015.

Apple Music reaches 15 million subscribers

Since its launch, Apple’s iTunes (AAPL) has generated revenue of approximately $3.5 billion, according to AppleInsider. In 2015, Apple’s services business also rose significantly by 60% YoY (year-over-year). A few days ago, Apple announced that Apple Music had over 15 million subscribers—up from 11 million in April 2016.

Apple makes up 12.9% of the Technology Select Sector SPDR ETF (XLK).


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