Apple CEO Tim Cook: "We're not in Apple Music for the money"
by Alan Friedman / Aug 07, 2018, 8:12 PM
Apple Music recently overtook Spotify and now leads its streaming music rival in the number of paid subscribers in the U.S. Apple CEO Tim Cook worries that the streaming music industry has become too beholden to computers. He says, "We worry about the humanity being drained out of music, about it becoming a bits-and-bytes kind of world instead of the art and craft." This comment from the executive was clearly aimed at Spotify, which has started turning to human curation for its playlist, and has actually grabbed Apple's former R&B curator Carl Chery away from Cupertino.
Yes, Apple and Spotify do have a rivalry going on, and the main difference between the two is that the former is part of a big company that earns billions of dollars each quarter while Spotify has yet to turn a profit in any quarter. This is why Tim Cook can say with a straight face that Apple is not in Apple Music for the money. Yet, it is part of Apple's services business that is a major focus at the company. Apple hopes to reach $50 billion in services revenue by 2021 from the $30 billion it recorded last year.
Apple does have a major advantage in distribution as the Apple Music app is pre-installed on the millions of iPhone and iPad models that are produced and sold every year. And there is Apple's HomePod smart speaker to consider. Spotify is available on the top two smart speakers by sales. That would be Amazon's Echo lineup, and the Google Home speakers. There has been talk about Spotify building its own smart speaker, but so far one has not surfaced.
It is interesting that both Apple Music and Spotify charge the exact same prices for paid subscriptions. That would be $9.99 per month for individual accounts, $14.99 for families with up to five members, and $4.99 monthly for students. Meanwhile, the latest data shows Spotify with 160 million global subscribers, 70 million paying monthly for the premium service. Apple Music has about 45 million paid subscribers.
There are also some differences between the two; Spotify offers a free-ad based tier of service that doesn't include some of the features offered with the premium paid monthly subscriptions such as free downloads, unlimited skips, the ability to play any song and create custom playlists. Apple Music does offer a free three-month trial, which is something that Spotify does not have.
Posts: 534; Member since: Feb 26, 2015
Not for the money, Say what now??
posted on Aug 07, 2018, 8:30 PM 14
Posts: 6737; Member since: Jul 11, 2012
"Apple hopes to reach $50 billion in services revenue by 2021 from the $30 billion it recorded last year." - no it's not about the money lol. /s "Meanwhile, the latest data shows Spotify with 160 million global subscribers, 70 million paying monthly for the premium service. Apple Music has about 45 million paid subscribers." - wait what?? Not only is the first sentence in this article contradictory, but didn't we read another article on PA recently that said apple now had more paying subscribers than spotify?? Is this another example of Mandela Effect?? WTF is going on???
posted on Aug 08, 2018, 2:06 AM 4
Posts: 30966; Member since: Feb 05, 2011
He’s lying his ass off. I actually like Cook, but c’mon bruh beezy, keep that ish real...Apple is in everything for the money, that’s why it’s a trillion dollar company. I like Apple, like I like Samsung, Chevy, Google, and friggin Pepsi. They’re all greedy, big, for profit, all about profit, bottom line companies. Don’t feed us bull***t Cook.
posted on Aug 07, 2018, 8:31 PM 29
Posts: 17; Member since: Dec 24, 2012
I get what you’re saying, and partly agree (wanting to grow service revenue as an example), but I don’t think he’s lying. Apple doesn’t do Apple Music to make money, because they make enough money on all the other aspects of the Apple ecosystem. I’m sure they don’t make that much money from it seeing that Spotify hasn’t been able to turn a profit in the same industry with more paid subscribers. Just an alternative viewpoint. But agree about greedy for profit companies
posted on Aug 07, 2018, 8:44 PM 1
Posts: 17; Member since: Dec 24, 2012
Haha a little bit, but no. Apple is heavy on the value of their ecosystem, so in the same way some people don’t switch to Android because of iMessage, Apple Music (and iTunes) makes people more likely to stay in the ecosystem, and keep Apple products when they upgrade.
posted on Aug 07, 2018, 9:02 PM 1
Posts: 2340; Member since: Feb 14, 2011
They really don't make that much money off of Apple Music. Spotify barely makes more revenue off their streaming service. Apple Music hit 40 million subscribers in April. That translates to $4.8 billion a year. But, Apple Music's margin is only 15% because 85% of it goes towards royalty payments. By comparison, Spotify pays a less per stream cost and therefore is about 80% towards royalty payments with a 20% margin. For this entire year, Spotify is set to rake in less than $5 billion. About $500 million of that is money made off of ads. So, even if Apple Music made what Spotify does at $5 billion (which again they probably make about $2 billion right now with the amount of paid subscribers they have and no ads), that represents 1.9% of their estimated 2018 revenue of $260 billion. Yes, Tim Cook is trying to obviously make any kind of money he can by expanding the Apple brand (which we will next see with a streaming service like Netflix), however he's not *completely* false in his statement considering the numbers.
posted on Aug 08, 2018, 12:00 AM 2
Posts: 86; Member since: Feb 01, 2017
The main difference between a long term successful company and a shortage term lived company is why they are doing the business to start with. From the start Apple was not in for the money but for the vision to offer easy to use products to the masses. They struggled after Jobs was kicked out not because they couldn’t do it without him but because they became business for the money. Of course a business has to make money, otherwise they won’t survive. But the point is about priorities and if making money is the top of the list or is there something else up there. It doesn’t go just for Apple but for any company.
posted on Aug 07, 2018, 10:06 PM 0
Posts: 1318; Member since: Aug 31, 2016
I love it every time an Apple executive says they're not in it for the money while laughing to check their multi million dollar bank accounts. Jon Ivy said it and bought a $20 million home the next day.
posted on Aug 07, 2018, 8:44 PM 13
Posts: 224; Member since: Jul 14, 2018
Obviously, Cook has been hanging around Trump too long.
posted on Aug 07, 2018, 8:59 PM 9
Posts: 17311; Member since: Jun 17, 2009
"Apple does have a major advantage in distribution as the Apple Music app is available for both iOS and Android devices." What? Are you claiming Spotify isn't available on both platforms?
posted on Aug 07, 2018, 9:06 PM 2
Posts: 299; Member since: Jul 21, 2014
$1000 phone..."we're not in it for the money"
posted on Aug 07, 2018, 11:13 PM 4
Posts: 348; Member since: Feb 16, 2017
If not then give us free music to listen to then, Jackass!
posted on Aug 07, 2018, 11:23 PM 7
Posts: 17311; Member since: Jun 17, 2009
What he's saying is Apple Music isn't making any money. And it isn't. Think about it - they've got roughly the same licensing deal as everyone else, and charge the same. If the others are losing money, so is Apple. Probably even moreso, since they give three months free but still pay the licensing during that time.
posted on Aug 07, 2018, 11:26 PM 2
Send a warning to post author
Send a warning to Selected user.
The user has 0 warnings currently.
Next warning will result in ban!
Ban user and delete all posts
Message to PhoneArena moderator (optional):