Apple v. Spotify
Apple depends increasingly on revenue and profit from its robust Services segment to drive financial results. We at CIRP have long maintained that Apple confronts a brutally competitive market for the range of services it offers, including streaming audio and video, extended warranties, cloud storage, and news and other information. This week we are looking at streaming audio, covering both music and podcasts.
Spotify is Apple’s key streaming audio competitor. We can look at how Apple compares with Spotify in both segments: streaming music and podcasts. Apple delivered music long before Spotify even started, predating streaming and going back to the original iTunes service. And while Apple did not invent the word “podcast” (it predates podcasts being available on iTunes), it was coined to combine “iPod” and “broadcast”, so Apple was still part of the origin story.
Yet, for Apple device owners, Spotify has caught up to Apple in streaming music and podcasts, despite launching its podcast service only a few years ago.
The service model differs between Apple and Spotify. Apple provides streaming music through Apple Music, for which it charges a monthly fee. Apple does not offer a free streaming music option. Apple does not have a subscription-based podcast service. All podcasts are available through the Podcast app, with publishers offering them for free or charging a fee, which Apple takes a share of.
Spotify has free and paid subscriptions. Both music and podcasts are available in either subscription, with some content exclusive to paid Spotify Premium members and an ad-free experience justifying the monthly cost.
Many Apple customers have both Apple Music and a free Spotify subscription. Of course, relatively few customers pay for both Apple Music and Spotify Premium, since the services are primarily redundant.
In 2024, half of Apple customers used paid Apple Music, while 41% used Apple Podcasts (Chart 1). While not as prevalent as music, podcast use has increased steadily in the past few years.