By Sophie Nevrkla
Apple Music’s biggest challenge in toppling market-leader Spotify is keeping listeners’ interest after they’ve subscribed, according to a new study by Cowen.
Since launching last year, Apple Music has acquired around 15 million paying customers, while Spotify currently boasts 30 million. However, last week, John Blackledge and Tim Arcuri of Cowen wrote that Apple Music has a ‘subscriber churn rate’ of 6.4% - three times higher than that of Spotify, which has a good track record for attracting and retaining loyal subscribers. The analysts also implied that even though Apple Music could rapidly catch up to Spotify’s subscriber count, almost 75% of these will eventually quit the service in favour of another option, going by current numbers.
Some have speculated that this is the reason behind Apple’s desire to acquire Tidal – exclusive releases on Tidal (such as Beyoncé’s Lemonade) could be an incentive for customers to stay on the service. Though Apple has recently secured some high profile, short term exclusive deals of its own (including Colouring Book by Chance The Rapper and Drake’s Views from the 6), these only stayed on the service for one or two weeks at a time. Combining Apple Music’s potential with Jay Z’s contacts and Jimmy Iovine (Apple’s current dealmaker) would likely result in a steady flow of exclusive content that would be an incentive for subscribers to stay on the service.
Such a move would almost definitely be a huge blow to Spotify, which stated in February 2016 that it wasn’t interested in exclusive content. This comes after a series of artists have been slow to allow Spotify to allow their music onto the service. Adele’s 25 has only recently been uploaded to the service, despite being released in November 2015; Coldplay refused to allow 2014’s Ghost Stories onto the service for four months; Taylor Swift pulled her entire catalogue off Spotify in 2014 – though Apple Music continues to have access to her supremely powerful catalogue.
Apple and Spotify have been at each other’s throats of late due to accusations from Spotify that Apple Music is anticompetitive and, as Spotify’s Jonathan Prince puts it, “have their cake and eat everyone else’s too.”