Apple Music could still struggle to catch Spotify (AAPL)

Apple Music Vs Spotify BI Intelligence

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Apple Music reached 30 million subscribers, up from 27 million in June, Billboard reports. The figure puts Apple Music at half the subscriber count of Spotify, which last reported 60 million paid subscribers in July.

Apple Music launched in early 2015, while Spotify launched in 2008 and has had more time to grow its subscriber base. Apple Music reported having 10 million subscriberssix months after launching in January 2016, while Spotify had 15 million subscribers at that time.

But Apple Music may still face an uphill battle in catching up to Spotify for the following reasons:

Spotify is partnering with other content providers to entice price-conscious consumers. A $4.99 bundle that includes Hulu’s limited commercial tier and Spotify's ad-free tier is a prime example. This strategy can help Spotify differentiate itself from Apple Music and potentially reel in long-term subscribers.
Spotify’s Hulu partnership also can provide consumers with high-profile video content Apple Music currently lacks. Hulu’s The Handmaid’s Tale was the first streaming-service original to win the Emmy award for Outstanding Drama Series, while Apple Music’s standing video content lineup has largely been harshly reviewed by critics. Additionally, winning the Emmy helps put Hulu on the creative map, and strengthens its ability to continue to make quality content.
Spotify’s ad-free tier makes it easier for the company to onboard new subscribers. Though Apple Music offers a free trial, it’s limited to three months. This might not be long enough for consumers in international markets like Japan, which still have a preference for CDs and are likely more hesitant to pay for premium accounts.
Spotify has accelerated its user growth rate even as its subscriber base has grown. The company went from 50 million subscribers to 60 million in four months, which is faster than the roughly 6 months it took for Spotify to reach 50 million subscribers from 40 million. On the other hand, Apple Music has added just three million subscribers in the three months since June. Spotify is projected to reach 70 million subscribers by the end of 2017, given the company continues its current growth rate, while Apple Music would only reach 33 million subscribers if it added another three million subscribers in the last three months of this year.