Music Business

Just 3% Of Apple Users Subscribe To Apple Music: Room For Growth or Failed Service?

Apple headphonesA new analysis by Amit Daryanani of RBC Capital Markets looks at the revenue that Apple Music and iTunes returns to Apple. But tucked within the findings is a stat that must make Apple wondered about the wisdom of putting their music plans in the hands of Jimmy Iovine and his $3 billion Beats/Apple Music team.


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Just 3% of Apple users (those that have installed an Apple iOS) have subscribed to Apple Music, according to a new study by analyst Amit Daryanani of RBC Capital Markets. Some would conclude that Apple Music was not resonating with Apple's customers; but Daryanani calls streaming a "very unpenetrated" sector in relation to the installed user base, and a "very attractive opportunity" for growth.

Even at its current levels Apple Music is contributing 12% of the revenue pouring into Apple's Services division (the App Stores, iTunes and Apple Music, AppleCare and Apple Upgrade Program, Licensing, and the Genius Bar). iTunes is still contributing 22%

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But Apple Music contribution to the bottom line looks less rosy when considering the low gross margins that it delivers.

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  1. 3% is over 20 million subscribers for a platform that’s only been available for 1 and a half years. It took Spotify 8 years to reach that mark. Seems like they’re doing pretty well.

  2. I’m with Josh. This will take time.
    So what’s the expected penetration, eventually? I’d call 20% the max, which would be roughly 140 million subs.

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