Apple Music User Growth Stalls, Potentially Impeding Service Revenue Growth?

Apple Music User Growth Stalls, Potentially Impeding Service Revenue Growth?In recent years, Apple has been steadily expanding its services business, with subscription services like Apple Music, AppleTV+, and Apple Arcade becoming key drivers of Apple's revenue growth. However, a recent Bloomberg report citing an interview with Universal Music Group suggests that Apple Music's user growth has hit a plateau

Apple Music User Growth Stalls, Potentially Impeding Service Revenue Growth?

In recent years, Apple has been steadily expanding its services business, with subscription services like Apple Music, AppleTV+, and Apple Arcade becoming key drivers of Apple's revenue growth. However, a recent Bloomberg report citing an interview with Universal Music Group suggests that Apple Music's user growth has hit a plateau. This news has raised concerns about the future growth prospects of Apple's services business.

Apple announced in 2019 that Apple Music had reached 60 million subscribers, but hasn't disclosed updated figures since. It's estimated that five years later, Apple Music may still have fewer than 70 million subscribers. This indicates that despite having a large global user base, Apple Music's pace of new user acquisition is slowing down.

Looking back at Apple Music's journey, it was officially launched in June 2015 and became available in mainland China on September 30th of the same year. On March 12, 2018, Apple announced that its streaming music service Apple Music had reached 38 million paid subscribers. Since then, Apple has been continuously introducing new features and services to attract more users and drive continued growth in its services business.

However, as market competition intensifies, Apple Music is facing increasingly challenging user growth. Competitors like Spotify and Amazon Music have achieved significant market share and user growth, while Apple Music struggles to break through its existing user base. Additionally, the streaming music market has become saturated, making it increasingly difficult to acquire new users.

Apple has been heavily investing in its services business in recent years, positioning it as a key strategic direction for future growth. In the third quarter of fiscal year 2024, Apple's services revenue reached $24.21 billion, a 14.1% year-over-year increase, demonstrating continuous strong growth. However, as user growth slows for services like Apple Music, future growth of Apple's services business might face greater challenges.

To address this challenge, Apple needs to explore new growth strategies. For example, it could expand the content offered in its music service, adding more exclusive content and features to attract more users. Additionally, it could strengthen partnerships with other platforms to broaden its user reach.

In conclusion, the plateauing user growth of Apple Music poses uncertainty for the future development of Apple's services business. Apple needs to take effective measures to address market competition, find new growth drivers, and ensure the continued healthy development of its services business.