Amazon Music’s subscriber base isn’t really growing faster than Spotify’s

Sometimes, something erroneous becomes such an oft-repeated ‘fact’ within the walls of this business, it’s worth us taking a second to deconstruct it. Take for example, this.

Last month brought with it a kick in the vitals for Spotify, when chatter emerged which suggested that Amazon Music’s global paying subscriber base was now increasing at a significantly faster rate than its Sweden-born rival’s.

From one perspective, this claim made sense: The Financial Times reported that, with 32 million subscribers across its Prime Music and Amazon Music Unlimited tiers in April this year, Amazon Music had enjoyed a 70% year-on-year rise in subs.

Although the FT didn’t reveal the exact number of subs Amazon Music had in the prior-year period, it’s not too tricky to work out: to achieve a 70% YoY rise to 32m, Amazon would have required a global subscriber base of approximately 19m people in April 2018.

The reason Amazon could claim a faster growth rate than Spotify in this period? On a percentage basis, Spotify’s subscriber growth was definitely smaller.

Between the end of March 2018 and March 2019, according to its financial filings, SPOT’s subs increased by 32% – obviously a materially stubbier rise than the 70% enjoyed by Amazon’s services in the comparable period.

However, this 32% rise in global subscribers for Spotify in Q1 2019 very much warrants some further number-crunching.

Spotify officially ended March (Q1) 2019 with 100m premium subscribers, up from 75m in the prior year period. That’s a YoY rise of 25m paying customers.

That 25m, in turn, represents a significantly faster subscriber growth than Amazon’s 13m increase in the year to April 2019; in fact, Spotify’s growth number is nearly double that of Amazon’s.

This is because, in real terms, Spotify’s subscriber base is growing far faster than Amazon’s, yet because of SPOT’s larger base comparison number, Amazon is, obviously enough, growing faster in percentage terms.

The most important data point here, surely, is how many actual paying subscribers these services are adding between any two given points.

And, in these terms, no-one in the audio streaming market can touch Spotify right now – including Amazon Music.

At the close of Q2 2019, as recently announced, Spotify had 108m Premium subscribers worldwide, which was up 31% – or, more importantly, by another 25m subs – on the same number (83m) in Q2 2018.

In fact, in its latest investor guidance, Spotify forecast that it will end 2019 with a subscriber count of between 120m and 125m subscribers globally.

That would be up by between 24m and 29m subscribers on the 96m subs Spotify counted when it closed 2018.

So, audio streaming services: by all means, if you’re adding more than 24m subscribers year-on-year right now, feel free to claim you’re growing faster than Spotify.

Shout it from the rooftops: the king is dead!

But if you’re not growing faster than 24m subs year-on-year – especially if, with a plus-13m growth, you’re over 10m subs behind this figure – we’re sorry to say, you’re still being bested by the biggest in the land.Music Business Worldwide

Related Posts