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The Latest Trends In Streaming Music, From Apple Music To Spotify

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The Latest Trends In Streaming Music, From Apple Music To Spotify

The big news this week in the music world is the Sirius XM Holdings Inc (NASDAQ: SIRI) buyout of Pandora Media Inc (NASDAQ: P). Prior to the merger news, Nomura Instinet analyst Mark Kelley released his monthly digital music tracker, which included all the latest numbers for Pandora, Spotify Technology SA (NYSE: SPOT) and Apple, Inc. (NASDAQ: AAPL).

What To Know

According to the most recent data from Triton Digital from the month of June, Spotify’s monthly session starts were up 16 percent from a year ago and its total listening hours were up 27 percent. At the same time, Pandora’s June session starts were up just 5 percent, and its total listening hours were down 2 percent from a year ago.

Sensor Tower data indicates Spotify’s app was downloaded 2.9 million times in the U.S. in the month of August compared to 3.1 million downloads in August 2017. Internationally, Spotify logged 12.1 million app downloads, up from 10.5 million downloads a year ago. Pandora had 2.6 million U.S. downloads in August, down from 3.1 million last year.

Apple Gaining Ground

Looking ahead, Kelley estimates Spotify will have 96 million paid subscribers in 2018 and 124 million paid subs in 2019. He also estimates 6.7 paid subscribers for Pandora in 2018 and 8 million paid subs in 2019. Kelley estimates Apple Music has a subscriber count of around 50 million, which includes paid subscribers and free trial subscriptions.

According to Loup Ventures, Apple is the most successful company at converting potential subscribers into paying customers. Loup estimates Spotify has converted just 0.24 percent of potential customers to paid accounts in the past three quarters, while Apple has converted 0.64 percent.

Loup’s numbers show Spotify is the dominant global leader in terms of paid subscribers with 62 percent market share. Apple has 34 percent market share but has gained 4 percent share in the past three quarters. Pandora’s market share is just 4 percent, down from 6 percent three quarters ago. In the past two years, Apple has increased its paid subscriber count by 137 percent compared to a 93 percent increase for Spotify and a 45 percent increase for Pandora.

Booming Business

Why do all these numbers matter? According to Axios, total U.S. music streaming revenue has doubled from $1.7 billion in 2016 to $3.4 billion in 2018. Those 2018 numbers include $2.5 billion in paid subscription revenue, $498 million in ad-supported streaming revenue and $399 million in customized radio revenue.

Those numbers suggest the market for streaming music is massive and is growing at an impressive clip, which is why SiriusXM, Pandora, Spotify, Apple and other companies are competing so fiercely for precious market share.

Related Links:

Wedbush: Pandora Investor Reaction Suggests 'Sirius' Problem With M&A Deal

Sirius Was Likely Impressed With Pandora's Near-Term Execution, Analyst Says After Acquisition Announcement

Posted-In: Apple Music Mark Kelley Nomura Instinet Streaming musicAnalyst Color Tech Media General Best of Benzinga

 

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