Is Apple Music Profitable 2024?

With an increase of 68 million users, Apple has witnessed massive growth in six years. All thanks to the platform’s focus on the user interface, sound quality, features, etc. But even with so much improvement, is Apple Music profitable?

Well, this is a question that most people want to find out, and in this guide, we aim to offer you exactly that.

So keep on reading to find out the surprising truth behind Apple Music’s profitability, subscriber count, revenue, etc.

Is Apple Music Profitable

About Apple Music

Launched on30th June 2015
HQCupertino, California
FoundersOliver Schusser (head of Apple Music), Brian Bumbery (director of publicity), and Trent Reznor (creative officer)
HeadquartersCupertino, California
Users 101 million users (estimates for 2023)
Market Share13.7%
Number of playlists30,000+ playlists
Number of songsOver 100 million
Most streamed artist on the platformTaylor Swift (2023)

Apple Music Key Statistics

  • Apple Music is the second most used music platform in the world and the number one music platform in the U.S.
  • There are currently 88 million subscribers to Apple Music, which is expected to reach 101 million by the end of 2024.
  • Apple Music is now available in over 167 countries.
  • The app offers over 60 million songs and 30,000 playlists.
  • 56% of users on Apple Music are females, while 44% of users are male.
  • On average, Apple Music pays $0.01 per stream.
  • Apple Music contributes 6.4% of Apple’s total revenue.

About Apple Music

About Apple Music

In the early 2000s, iPod and iTunes revolutionized the music industry as they allowed users to store thousands of songs on a single device.

At that time, Apple had a lead over other music platforms thanks to the iPod, and this increased even further with the launch of the iPhone.

However, CEO Steve Jobs failed to see the potential of digital music streaming at that time and hardly grew it. Spotify, however, saw the opportunity and accumulated 22 million subscribers by the time Apple Music came into play.

Apple then finally took music streaming seriously, acquired Beat Music for $3 billion, closed it, and launched Apple Music in 2015.

Luckily, a lot of artists supported Apple Music; it even launched several radio stations featuring popular DJs and artists such as ex-BBC Zane Lowe and Ebro Darden.

In spite of user interface issues, Apple Music hit 11 million subscribers right in the first year of launch. The platform then fixed this error, and today, it has grown to over 101 million users.

Apple Music is today the number one music platform and a tough competitor of Spotify, which is still the king in Asia, South America, and Europe.


How Does Apple Music Compare to Spotify?

How Does Apple Music Compare to Spotify

The most significant difference between Apple Music and Spotify is that the former offers subscription-only service while the latter also offers free ad-supported listening to users.

This difference in strategy affects how the two platforms pay artists and earn revenue.
Spotify believes that by offering a free tier, they are preventing users from seeking “non-revenue-generating alternatives” or piracy.

Although this makes sense for Spotify, they get less revenue per listener because of the free tier.

See this- in 2020, Spotify had 155 million paid subscribers and 199 million free listeners. However, the app’s ad-supported revenue was only 281 million euros, whereas its revenue from paid subscribers was 1.89 billion euros.

That’s not the case with Apple Music

Now, Apple Music is in a pretty advantageous position compared to Spotify in this sense. You see, Apple Music owns the whole distribution platform.

Sp first of all, it is impossible to use Apple Music on any other device that is not made by Apple. Additionally, every Apple iPhone comes with Apple Music in-built, which is the default music app.

So even if the user wants to play any music that’s already downloaded, they can do so only via the Apple Music app.

This allows Apple Music to onboard new users without needing to tempt them with a free ad-supported service.

This is the reason why Spotify is not so profitable as compared to Apple Music.


Apple Music Annual Revenue

Based on the total streaming global revenue, it is estimated that Apple Music made $8.3 billion in 2022 compared to the revenue of $7 billion in 201.

In 2016, Apple made a revenue of only $0.6 billion compared to its revenue in 2022. This shows how much Apple Music’s revenue has grown over the years.

You must also note that Apple Music is one of the key contributors to Apple’s overall revenue. Apple Music contributes more than 6.4% towards the overall revenue of Apple Services.

Here’s a graph showing the estimates revenue of Apple Music over the years:

Apple Music Annual Revenue

Is Apple Music Profitable?

As we mentioned before Apple Music made an estimated revenue of $8.3 billion in 2022. That is an increase of 18% year-over-year, so Apple Music is definetly profitable.

However, Apple Music makes low profits because of the high royalty it pays to artists and music labels. Macquarie’s Schachter said that Apple Music has gross profit margin of only 15% which is lower than Spotify.


Apple Music Users

The total number of Apple Music users has been increasing consistently ever since the app’s launch. In 2022, Apple Music had 88 million users, as compared to 80 million users in 2021.

Here’s a graph showing the increase in the total number of Apple Music users over the years:

Apple Music Users

Apple Services Revenue

The revenue of Apple Services has also increased in the past few years where iphones are the major driver of revenue, Apple Music contributes 6.4% as mentioned earlier.

Apple Services generated $85.2 billion in 2023 and here’s a table showing the company’s revenue growth since 2016.

Fiscal YearApple Services Revenue
2023$85.2 billion
2022$78.1 billion
2021$68.4 billion
2020$53.6 billion
2019$46.1 billion
2018$36.9 billion
2017$29.8 billion
2016$24.1 billion

Apple Music Market Share 

Spotify leads the music market with 30.5% market share, followed by Apple Music (13.7%) and Tencent Music (13.4%).

Spotify’s market share is almost double that of Apple Music. This is because the latter lacks many features when compared to Spotify.

Here’s a table showing the list of different music platforms and their respective market share in the industry:

Music streaming platform Music streaming market share  
Spotify30.5%
Apple Music13.7%
Tencent Music13.4%
Amazon Music13.3%
YouTube Music8.9%
NetEase6.1%
Yandex2.2%
Deezer1.5%
Other10.2%

Apple Music VS. Spotify Difference

Since Spotify is the biggest competitor of Apple Music, here’s a table showing difference between the two:

ParamtersApple MusicSpotify
Market Share13.7%30.5%
Revenue$8.3 billion$13.647 billion
Number of Users101 millionover 574 million
Number of Songsover 100 million songover 100 million song
Pay per stream$0.01$0.003 to $0.005

Well, clearly, Spotify is much ahead of Apple Music both in terms of the market share and the total number of users.

Here’s why Spotify Dominates Other Music Streaming Apps


Wrap Up

Apple Music is growing each year in terms of revenue, profit, users, etc. However, it is still much behind its biggest competitor, Spotify.

And even though Apple Music has the lead in the U.S., in the world, people prefer to use Spotify more.

So, will Apple Music be able to become the number one leader in the music streaming world? Only time will tell. As for now, we hope you found this guide useful and were able to find your answer to the: Is Apple Music profitable in 2024?


FAQ’s

Who is the most streamed artist on Apple Music?

Taylor Swift is the most streamed artist on Apple Music, followed by Morgan Wallen and Pop icon.

Apple Music support which platforms?

macOS, iOS, tvOS, iPadOS, watchOS, HomePod, CarPlay, Windows, Chrome OS, Amazon Echo, Android, Sonos, and web.

Who pays more royalties Apple Music or Spotify?

Apple Music pays more royalty ($0.01 per stream) because its subscriber base is all paid.

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