Music Business

Spotify , Pandora, YouTube Top 10 App Earners In 2016 Proving That Freemium Still Works

CashA new analysis proves just how dominate a player Spotify is. The study of app downloads and app revenue showed that the music streamer was the top earner both in Apple's App Store and overall (App Store and Google Play) globally in 2016


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Spotify earned more revenue than any other app in Apple's App store last year, according to a new analysis by SensorTower. Spotify was also #1 in global app revenue for both the App Store and Google Play combined, despite not placing in Google's revenue top 10.  Pandora was #5 overall globally and #4 in the app store.

A surprise app revenue earner was YouTube at #10. There earnings likely come from both fan payments to creators and subscriptions to YouTube's fairly new paid offering YouTube Red.

Freemium Does Drive Revenue

YouTube, Spotify and Pandora all have extensive and popular free offerings, which uncharted Apple Music, Napster and Tidal do not. That's great news, if – as Spotify and YouTube are – you're sitting across the negotiating table from the major labels. Landing in the app revenue top 10 is a ringing affirmation that freemium (free-t-o-paid-conversions) still can drive revenue. 

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New installs of apps from both stores totaled approximately 19.2 billion in Q4 2016 with there were more than 80 billion app downloads overall during 2016. Downloads were up 17% year over year for the quarter.

When revenue is taken out of the equation, music apps fail to chart.

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  1. “Proving That Freemium Still Works” is a bit of a troll. Works for who? the musicians? the consumers? the labels? the investors? This post needs better definition.

  2. The rap against freemium – in this case free music – has always been that it does not lead to revenue. But here Spotify and Pandora are generating top app revenue by converting free to paid. More app revenue that Apple, Tidal or Rhapsody that do not have free tiers.
    That’s not to say that the labels should not limit free music more, but it does show that it has a place in the revenue creation chain.

  3. They are all going to lose 10 to 200 million this year. Only the internet believes a good business is good even when it’s losing millions, as long as there are users. Problem is that all users are one click away from any other site on the internet. As soon as something is better, people will leave. It has happened before and will happen again. In fact, if user exodus isn’t happening, it’s a sign that innovation in tech isnt happening. Streaming music WILL NEVER WORK UNTIL THERE ARE NO MORE MIDDLE MEN. This isn’t to say that a company cannot build a service profit for artists and users, in saying that the nature of the streaming business model is designed to maximize self profit. They do this by devaluing music by making it an all you can eat for one price. Free music isn’t the problem, the problem is an all you can eat format makes users see music as an end product only, instead of users engaging with artist. This is why Millennials can’t say who they’re favorite bands are… the platforms aren’t designed to actually dig deep into an artist, instead there favorite artist is the Spotify search bar. The stream mode will not only fail, buts it’s causing damage by establishing a listening habit that actually isn’t listening, but consuming.

  4. Consumers love streaming and in the end they get what they want.
    My father used to say, see the world the way it is, not the way you want it to be. I say the same to you.

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