Apple Music's annual growth set to reach 40%, propelling Services revenue

Apple Music's annual growth set to reach 40%, propelling Services revenue
According to analysts, Apple Music could grow as much as 40% annually. The popular streaming service is already expected to overtake Spotify in the US by this summer to become the number one service and most recently reached the milestone of 40 million subscribers. And now, according to analysts, Apple’s service could continue to grow significantly in the years to come. 

In recent times, Apple Music has been growing by around 2 million subscribers per month and it appears a similar growth pattern is expected to continue over the course of the next three years, with an annual rate of around 40%. This will ultimately result in intense competition at both a national and international level for Spotify, which itself recently went public. Apple Music currently operates at a profit margin of around 15%, with this expected to remain largely the same over the next few years. Rival Spotify, on the other hand, has the upper hand here by boasting a margin of 24%, although this could decrease in the future. In any case, not all of Apple Music’s future growth is expected to come from music. Despite the service’s name, Apple is set to increase investment into video content significantly, with the Silicon Valley-based company’s budget set to reach $1 billion by 2022, equating to an annual increase of 54%.

Currently, Apple Music is one of the biggest contributors to Apple’s Services revenue alongside the App Store. In fact, together, the two services helped the category post $8.5 billion in revenue during Apple’s Q1 2018 financial period, which represented an increase of 13% year-on-year. Also, with iPhone sales expected to continue declining in the near future, the importance of Apple's Services category is rising.


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4 Comments

1. bucky

Posts: 3791; Member since: Sep 30, 2009

I received another 30 day trial offer for Apple Music. I still don’t see how it competes in anyway to Spotify. The only benefit is better integration of my downloaded music but that’s it. Spotify user created playlists are king and I can give my wife my log in info when I’m not using Spotify as well. Apple Music is tied to my Apple ID.

2. gamehead unregistered

I love this service

4. cmdacos

Posts: 4267; Member since: Nov 01, 2016

I just create a new apple id every 6 to 8 months to test Apple music for free to see if they are doing anything interesting.

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