US streaming music industry revenues have more than doubled
Apple’s (AAPL) Apple Music service has made a lot of progress in the last one year or so. Apple has now managed to grow its paid subscribers for its music service to more than 17 million. Apple Music revenues rose 22% in the last quarter year-over-year. This meant that Apple Music was another driver of growth for Apple’s Services business in addition to App Store and Apple Pay.
Apple Music has also been instrumental in lifting the overall music streaming industry. According to a report from the Recording Industry Association of America, US subscription streaming music revenues more than doubled from $479 million in 1H15 to $1,013 million in 1H16. The chart below shows how this industry accelerated in the last one year, coinciding with the advent of Apple Music.
Apple has some competition to contend with
According to the J.D. Power Streaming Music Satisfaction Study, Apple Music was named the top-rated music streaming service. The study mentioned that 35% of respondents were “strongly committed” to Apple Music. In comparison, 30% of respondents were strongly committed to Spotify and Google Music (GOOG). A large proportion of subscribers (almost 62%) stated that device compatibility was the main reason to sign up for Apple Music compared with 53% for Google Play Music and 52% for Spotify.
Although Apple has made significant progress in the music streaming market, it still trails market leaders Spotify and Pandora (P), which have 100 million and 80 million subscribers, respectively. However, Spotify has only 30 million paid subscribers, and the company has taken almost ten years to reach this figure. Additionally, Amazon (AMZN) recently launched its “Music Unlimited” service, which has “tens of millions” of songs compared to Prime Music’s two million songs.