Spotify Extends Its Lead Over Apple Music In Terms Of Paid Subscribers

Apple Music

When it kick-started in 2016, Apple Music sure seemed like it would give Spotify a run for their money. But as time passed, Spotify’s with their singular focus on adding more subscribers in a shorter period, has increased its lead much further ahead of the iPhone maker. Spotify has added 20 million subscribers in less than a year, while Apple Music could just make half the progress. As of June, the former music streamer has 60 million subscribers, and the Cupertino based company has 27 million only.

Apple loyalists did, however, switch from Spotify to Apple Music, which contributed to closing of the gap between the two companies. In fact, Apple Music in India also has a decent following as well. However, Spotify’s continuous growth rates despite competition from one of the world’s most powerful tech giants is a testament their product and the community they have built.

You will be offered a three-month free trial to Apple Music which comes pre-installed on iPhones. Apple also shells out a lot of finances to maintain their exclusive early access to top albums. These benefits may have helped Apple Music to win over fans of particular artists, but mainstream listeners finally switch to mp3. And for music lovers, Spotify has always been the go-to streaming service.

As of now, Spotify is gearing up for “direct listing” where the company intends to go public without doing an IPO. So, the insiders of the company and not the company itself will be selling shares in the stock market.

This comes as an unusual move and the idea has met with a lot of scepticism. Many companies dread the entire IPO process which involves the rounding up of investors by the bankers and determining a price for its debut. However, it is an opportunity for the company to raise money.

The growth of the streaming app has been fueled by multiple important product developments. One of the most important ones being Discover Weekly, which was a wildly popular weekly update done by Spotify. It personalized playlists for the users and became a top choice for the music fans who are trying to find new songs and artists to love. It reaches 40 million users in its first year itself.

Although initially stuck with a bad rep for not giving enough royalties to musicians, later on, the payouts of Spotify had significantly grown alongside their subscriber base. The money and the leverage that it built after it became a must-have distribution channel for artists who want to land big hit record lured out hold-out artists like Taylor Swift to adopt Spotify.

Also, Spotify is one of the premier partners of Google Home, who have recently allowed control of Spotify’s free ad-supported service. 

The No-IPO Policy

Although it has not been spoken officially by Spotify about the expected direct listing industry insiders, believe that it could avoid some of the initial volatility. While some companies have trouble maintaining in the eventual weeks, Bankers usually recommend a lower share price for a first-day pop. Some theories mention that this could be a way around.

This also could be a way to avoid the ‘lock-up’ periods when the insiders can’t sell shares for the initial months after the company goes public.

Experts are also saying that if this experiment by Spotify goes well, we will soon see other companies replicating it.

Nevertheless, it is possible for Spotify to create even more volatility. There has been no announcement about the specifics of the plans to execute the process, but part of the reason why IPO shares are sold to institutional investors is that they’re expected to hold their position longer.

Now, all that Spotify has to rely on is their cache of cool with their fans to drive public support for its share price while it fends off Apple Music’s invasion of its streaming kingdom.

India, in spite of being the second largest smartphone market in the world, after China, Spotify has not yet ventured here. While Apple Music in India roots itself deep in the hearts of the people, there may not be a lot of hope for the international music streamers to penetrate the market. All we can do is wait and watch if in the coming years Spotify launches itself in India and what they have in store for us.

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