Apple AAPL -0.31% is finally letting the other half of the world in on Apple
Music. A few days ago the company announced that the streaming service is now
available to Android smartphone users. This now puts the service within reach
of about 52 percent of the market (that’s about 1.2 billion users, according to Google GOOGL -1.21%) that couldn’t
previously experience the streaming music app when it was relegated only to the
iOS platform. The real question is, how many of those Android users are really
interested in trying Apple Music?
Actually Apple Music
Android can still be considered in beta, with two of its features, the family
membership plan and Apple Connect videos, currently not available. Other than
that, the app is same as what’s found in the iOS version. It’s currently
available in over 100 countries, although not China, where the largest
group of Android users happen to live.
A Look Inside The Numbers
On the surface, this looks
to be a good move for increasing user numbers for the streaming service. Apple
Music currently has 6.5 million paying subscribers a little more than 4 months
after its launch. That’s good enough for second place behind Spotify’s 20
million paying customers, and that’s with being available to less than half of
the available audience.
The silhouette of Tim Cook,
chief executive officer of Apple Inc., is seen as he exits the stage during the
Apple World Wide Developers Conference (WWDC) in San Francisco, California,
U.S., on Monday, June 8, 2015. Photographer: David Paul Morris/Bloomberg
That said, the 6.5 million
number may be deceiving, since many of those may have forgotten to turn off
their subscriptions at the end of the three month trial period. This means that
we won’t know the true number of iOS subscribers for some time yet.
The user number still may
not get a huge bounce even with the release of the Android version though,
since the new version won’t have the marketing momentum of the original launch.
This may result in far fewer opt-ins to the 90 day trial period than might have
otherwise been possible with a day and date launch on both platforms.
Other Factors Involved
It’s also possible that the $9.99 monthly subscription rate may be
too spendy for the Android audience as well. Many studies have shown that
Android users are less likely to purchase apps and subscriptions than iOS
users, and generally spend less money on those products when they do.
Looking at the big picture though, the fact of the matter is that
6.5 million paying customers for a company that boasts 850 million credit cards
on file is far fewer than probably anyone might have expected. Granted, a
little more than half of those customers couldn’t be accessed until now because
Apple Music wasn’t available on Android, but we’re still talking less than a 1%
conversion rate here.
If anything, this points to the fact that the $9.99 price point
may just not be in line with consumer reality, which may be hindering uptake
from freemium tier or trail periods for all music services, not just Apple
Music.
The Reality May Be Different
Truth be told, just about every streaming service would prefer a
lower price point (Apple reportedly wanted to launch at $7.99), but are being
forced by the major labels to stay at $9.99. A lower price makes sense in that
it would make it easier to get a trial user to commit to the paid tier.
Then there’s the fact that a 10 buck charge for something that you might not
use that often or don’t absolutely love is readily seen on your credit card
bill, while $4.99 might not be enough to bother with and easy to let slide.
If anything, price may be the single biggest reason why paid
streaming still has the relatively low numbers that it does. After all, there
are only 41 million paid subscribers worldwide (according to the IFPI) out of 7
billion people in the world.
Granted, not all of those 7 billion people are candidates for
purchasing a streaming music service, but the comparison does illustrate just
how far streaming music has to go. On the other hand, it also shows the
tremendous possibilities for growth as well.
In the meantime, it will be interesting to see just how much the
Android version of Apple Music impacts the service’s user and revenue numbers.
Unfortunately, we probably won’t be able to properly gauge just how well Apple
Music is really doing until next year about this time when the numbers have
settled down after the various trial periods. One thing’s for sure though,
there’s still a lot of growth in the streaming space left to go.
- Bobby Owsinski [forbes]
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