With the release of Apple Music and Beats 1 yesterday, there is still much speculation on Apple’s revenue model. AdExchanger’s Liz Rowley interviewed several leaders in the industry to get their take on the future of subscription-based vs. ad-supported streaming music services. All agreed the ad-supported model will continue to be the majority of listeners’ preference. The article states, “Spotify, which has more than 75 million users, and only 20 million paid subscribers who don’t hear ads, is the exception.”
It goes on to quote XAPPmedia CEO Pat Higbie: “‘Companies like Spotify have driven subscription rates higher,’ Higbie said. ‘But they’re the leader in subscription percentages as far as total listenership. If you look across the board, only 5% of Pandora’s 80 million listeners pay a subscription fee.'”
The article also states, “Strategy Analytics predicts that while mobile music-streaming audiences will grow from 320 million in 2014 to 808 million in 2021, only 11% of listeners will be subscription-monetized and 89% will be ad-monetized.”
Pandora co-founder Tim Westergren is quoted saying, “‘Ad-supported radio is a powerful and essential promotional tool for expanding any music maker’s audience and delivering a fantastic experience to listeners,’ he said. ‘Apple’s investment in the streaming music category at large simply reinforces our long-held belief that there is healthy consumer demand for these types of services.'”
After the three-month trial period is over, it will be interesting to see Apple Music’s subscription rates, along with which brands decide to “sponsor” Beats 1 radio.
To read the full AdExchanger article, click here: