Spotify Claims 40 Million Paid Subscribers, More Than Double Apple Music Total

When Apple Inc. (NASDAQ: AAPL) announced 17 million subscribers to its Apple Music service last week, the total had grown by 4 million since April. In a tweet early Wednesday morning, Spotify CEO Daniel Ek said that his streaming music service had reached 40 million paying subscribers, up 10 million since Spotify reported 30 million subscribers in March.

Spotify also reported 100 million users combined for its free and subscription music service back in March.

Pandora Music Inc. (NYSE: P) announced a deal with three major music industry companies on Tuesday, and claimed 78 million active monthly users. The new Pandora licensing agreements allow the company to offer a freemium service in the United States similar to Spotify (Apple does not offer a free tier). The rumor is that the company will offer a streaming service for $5 a month that is similar to its current advertising-free service but adds features like skipping more unwanted songs and creating and storing personal playlists.

There’s also a new player about to enter the streaming music game, and it is another one, like Apple, with very deep pockets. Amazon.com Inc. (NASDAQ: AMZN) is expected to announce a streaming service, also priced at $5 a month, for owners of its Echo speaker and $10 a month for other users.

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Another privately held player is Berlin-based SoundCloud, which claims 175 million unique monthly users and which launched its $10 per month ($13 for iOS users) subscription service in March. SoundCloud allows musicians to upload their own music, differentiating the service from the crowded field. Until September 19, SoundCloud is offering a trial subscription for 99 cents a month for three months.

As for the celebrity-backed Tidal, the less said the better. Let’s just say it hasn’t gotten much traction, although it might be doing better than whatever Google’s service du jour is.

If Spotify can add more than twice as many new paid subscribers to its rolls as Apple, then it seems reasonable to conclude that the free tier that Spotify offers is the difference. That freemium model sticks in the craw of record industry moguls used to taking all the loose change from any record deal and that continues to whine and toss up red herrings seeking protection from legislators. The latest is “stream-ripping,” which is apparently the capturing of a music stream into a file on the user’s hard drive. If that is the case, it can’t be happening in very large numbers because it really is a waste of time to steal a low-quality copy that takes minutes to rip when for a few pennies and virtually no time expenditure, a listener can have any tune in the world in a high-quality version.

The clear leader in streaming services is Spotify, and whether Apple or Pandora or SoundCloud or Amazon can overtake the Swedish giant is questionable. That doesn’t mean they won’t be taking plenty of shots though.

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