Apple Music and Stats

August 19th, 2015

There are surveys and there are surveys. Depending on the methodology, and the accuracy of the sampling, you can get all sorts of results, and some might even be accurate to a degree. If the market research company has an ax to grind, numbers can be appropriately manipulated too, but the survey that forms the basis of this little discussion does not appear to have been performed by such a company.

It comes from MusicWatch, a firm highly respected in the industry, and is based on interviews with 5,000 U.S. customers. As you’ll see shortly, however, that may not guarantee an accurate result.

The key metric is the number of Apple Music users who plan to pay for the service when the 90-day free trial expires, and that’s 64%. Getting nearly two-thirds who intend to keep up their memberships is actually a decent result, but some of the other figures are disquieting.

So we have 48% of those who sampled Apple Music no longer using it. It sits idle. Now it may be that some of these people will come back to it later, and the survey doesn’t specify exactly how long these users tried the service before giving up on it, or perhaps they are just ignoring its presence. This also appears to fly in the face of the first number, that 64% will plan to actually pay for the service when the free trial is up. Does this make sense?

The mind boggles.

Another significant number is that 61% of those responding to the survey have disabled the auto-renew option in their iTunes accounts. Now many may be hedging their bets, but the figure is surprising, because most people who actually sign up for free trials aren’t likely to consider a recurring payment until the payment comes due unless they intend to cancel. Or at least that’s my impression in signing up for free trials over the years.

Of the Apple customers surveyed, 77% knew of Apple Music, so there is surely room to grow. It all depends on how well Apple is promoting the service, and whether there will be more blatant appeals with the OS X El Capitan and iOS 9 releases. In all, 11% of Apple’s U.S. customers have supposedly tried Apple Music. But this is a curious figure, since, worldwide, only 1.4%, or 11 million, have actually signed up for the free trial, or maybe U.S. numbers skewed higher. It would be nice to see some sort of worldwide survey.

One disturbing comment comes from Russ Crupnick, Managing Partner for MusicWatch, who, in explaining the “subpar’ numbers, states, “That’s the disadvantage of not being the first mover in a market where very good services currently exist.”

That goes to suggest that Apple isn’t bringing much, or anything, new to the table, and that people are already happy with Spotify and other subscription services. But cconsider the situation in the smartphone segment before the iPhone arrived. Were customers already satisfied with their BlackBerry? I expect if you polled them at the time, that would have been the case.

But wait, there’s yet another report about how many Apple Music users are still using the service. It comes directly from Apple, which states that the percentage is closer to 79%. It does seem more credible, considering the high percentage of users who plan to continue to use the service.

Commenting on a recent survey conducted by research firm MusicWatch, which claimed only 52 percent of Apple Music trial customers still use the service, Apple said the actual attrition rate is closer to 21 percent.=

True, the Apple Music advantage may be ephemeral to some. More hands-on curation, integration with Apple’s ecosystem, Beats 1, and some exclusive tracks, such as the Beatles. That’s hardly a new paradigm, but merely an Apple slant on existing subscription structures. So it may be less distinctive.

But wait, there’s yet another report about how many Apple Music users are still using the service. It comes directly from Apple, which states that the percentage is closer to 79%. It does seem more credible, considering the high percentage of users who plan to continue to use the service.

When you consider the possibilities for success, don’t forget that it took Spotify seven years to hit 20 million paid members. Apple got 11 million to subscribe in one month, and if seven or eight million keep their memberships, that would be a decent result. I would also assume that, by September 30th, many millions more will have decided to sample Apple Music.

Sure, Spotify started from nothing. Apple already has 800 million iTunes accounts, but it’s real early in the game, and it would be wrong to bet against Apple. Besides, there is just no precedent for a company with a user base that large starting up a music subscription service from scratch. Apple appeared pleased with the 11 million number; some tech pundits are skeptical.

It’s also possible that the early Apple Music glitches might cause some people to hold back. At the end of the day, however, I think it’s more about individuals deciding if they need to subscribe to anything new, and whether what Apple is offering is on their radar. That remains to be seen.

Besides, based on the first month’s numbers, assuming almost two-thirds keep their subscriptions, that Apple will probably beat Spotify and then some by the end of the year. If customers are satisfied, they won’t cancel, and that’s where Apple has to be mindful of the initial problems and make sure most are eradicated when the holiday rush begins.

Let me make it personal. I subscribed to Apple Music on the first day. While the For You feature took a while to grasp my musical tastes, it’s somewhat better now. I haven’t lost any music, and unwanted DRM is not attached to any of my own content. While I have not disabled auto-renew, I’m not at all sure if l want to keep it running. Maybe I’ll upgrade to the family version so my son, Grayson, who listens to more music than his dad, will have access to the service.

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