It appears Apple Music has secured a win in the battle for streaming supremacy.
According to the Wall Street Journal, sources familiar with the matter say Apple Music has surpassed Spotify in terms of paid subscribers in the U.S.; the former reportedly ended February with around 28 million paid subscriptions, while the latter was sitting around 26 million. Yes, it's a major turning point in the ongoing "streaming wars," but Spotify isn't exactly getting dominated.
Though Apple Music is leading in paid U.S. subscribers, Spotify still has a larger total of U.S. subscribers thanks to its free tier. It's also worth noting that Spotify also leads when it comes to worldwide subscriptions. According to a December 2018 report, Spotify had around 207 million global users, 96 million of whom had paid subscriptions or were "in a trial period leading to a subscription." Financial Times reports Apple Music, which does not have a free tier, has about 56 million paid subscribers worldwide.
As the WSJ points out, a big factor in Apple Music's popularity is the fact that it is preloaded on most Apple products, including the iPhone. According to market research firm Strategy Analytics, there are about 101 million active iPhones in the U.S.
Back in March, Spotify filed a complaint with the European Commission, claiming Apple had "unfair advantages" over competing music streaming apps.
"To illustrate what I mean, let me share a few examples," Spotify founder Daniel Ek wrote. "Apple requires that Spotify and other digital services pay a 30% tax on purchases made through Apple’s payment system, including upgrading from our Free to our Premium service. If we pay this tax, it would force us to artificially inflate the price of our Premium membership well above the price of Apple Music. And to keep our price competitive for our customers, that isn’t something we can do."
Apple CEO Tim Cook fired back, accusing Spotify of using "misleading rhetoric."
Per Apple's press release:
After using the App Store for years to dramatically grow their business, Spotify seeks to keep all the benefits of the App Store ecosystem — including the substantial revenue that they draw from the App Store's customers — without making any contributions to that marketplace. At the same time, they distribute the music you love while making ever-smaller contributions to the artists, musicians and songwriters who create it — even going so far as to take these creators to court.
Spotify has every right to determine their own business model, but we feel an obligation to respond when Spotify wraps its financial motivations in misleading rhetoric about who we are, what we've built and what we do to support independent developers, musicians, songwriters and creators of all stripes.