With Streaming, Apple's Music Business Is Growing Again - eMarketer

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With Streaming, Apple's Music Business Is Growing Again

Combination of streaming and downloads clicks

February 1, 2017

Apple said that the addition of its streaming service stemmed declines in its music business.

Streaming Music Subscriber Share Worldwide, by Service, Dec 2016 (% of total)

In its fiscal first quarter earnings call on Tuesday, Apple was spare with details, saying only that revenue from its music business grew. Overall, revenues from Apple’s services, which includes apps, digital music, Apple Pay and cloud storage, grew 18% year over year.

“Having the combination of download and streaming [services], which we didn’t have until recently, we’ve been able to bring our music business back to growth,” said Luca Maestri, Apple’s senior vice president and chief financial officer.

Beyond its music business, Apple posted an overall revenue gain for the quarter, its first after three quarters of declines. Sales of the latest iPhone helped phone shipments reach a new high.

Though Apple pioneered digital downloading, it was late to the music streaming game. But it has made up significant ground with Apple Music. Last month, the company said Apple Music surpassed 20 million paid subscribers. Spotify reports roughly double that amount.

Data from Midia Research indicates that Spotify holds 43% of the paid music subscription market worldwide, while Apple has a 20.9% share.

In terms of sheer listening time, Pandora remains the leading music service in the US, according to January 2017 data from MusicWatch. But Pandora has yet to roll out its new Premium option, which will offer on-demand, ad free streaming and the ability to save songs and albums offline, similar to other all-you-can-eat streaming services, and which will carry the now-standard price tag of $10 a month.

—Rimma Kats

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