When Apple Music was unveiled in June, Spotify’s first real competitor showed its hand. Hundreds of millions of iPhone and iPad owners were given access to a built-in service that fundamentally does the same thing as Spotify — stream music on-demand.
But fast forward several months later, and Spotify’s growth doesn’t appear to have been stalled by Apple Music at all. In fact, Spotify is selling better in the App Store than ever before.
Spotify became the highest-grossing app in the US App Store for the first time in its history on October 20, as first noted by TechCrunch. As of October 21, Spotify was the third highest grossing app in the store.
The App Store’s highest grossing chart is not the same as the top paid chart — highest grossing apps can be free to download but usually offer in-app purchases and subscriptions to generate revenue over time, like “Clash of Clans.”
That means more people are downloading the Spotify app and, most importantly, paying for its $US12.99-per-month premium subscription to remove ads and other restrictions on free users. This upgrade behaviour is despite the fact that Spotify has been actively alerting its users to avoid paying for its in-app subscription because the price is higher than on Spotify’s website.
A Spotify premium subscription normally costs $US9.99, but if you pay for it in the iOS app, it costs $US12.99. Why the up-charge? Apple takes a 30% cut of all in-app purchases through apps on the App Store, so Spotify would be taking a hit if it charged the same $US9.99 fee as it does from its own site.
Spotify hasn’t shared its user base numbers since the launch of Apple Music nearly four months ago, but as of earlier this year it had 20 million paid and 55 million free listeners. Apple saw a height of 15 million people using its service during its three-month trial period, and CEO Tim Cook recently said that Apple Music has 6.5 million paying subscribers.
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