Apple does not have a strong anchor service to retain customers in the subscription ecosystem and there isn’t any unique advantage that gives the company pricing leverage. This could indicate that Apple is facing headwinds in this service. Whenever Apple reaches a milestone, we have heard from the management. Apple is unusually reticent regarding its numbers. The growth of YouTube Music has been the fastest among all the players. YouTube has already announced reaching 80 million mark by end of September 2022 which was a substantial growth from the 50 million subscribers reported at the end of September 2021. This forces us to rely on third-party research. Source: MIDiA ResearchĪpple and Amazon do not provide regular updates on subscriber numbers in the music streaming service. This makes music streaming industry very attractive for Big Tech companies as it helps them move the needle in terms of revenue and valuation.įigure 1: YouTube Music is in the fourth position for music streaming industry, excluding China. At the current trajectory, we could see the paid subscriber level reach over a billion customers by end of 2025. The music streaming industry has gained over 600 million subscribers and is still growing at a healthy pace. A strong subscription business should help the company gain better bullish sentiment and a jump in valuation multiple. Alphabet stock is trading at a lower valuation multiple compared to other Big Tech peers. Over the long run, we could see music streaming industry getting cornered by Big Tech players and Alphabet has a good chance of being the market leader in this business.Ī large subscriber base provides Alphabet with regular recurring revenue, a platform to launch future services, and a longer growth runway.

Within the next few months, this number should cross 100 million level which would be very positive for the company as it was a latecomer in this race. The company has announced crossing 80 million subscription level including free trials for the quarter ending September 2022. However, YouTube could soon reach second position as the value proposition for a combined YouTube Premium subscription is very attractive to many customers who regularly use YouTube streaming. Alphabet’s YouTube Music service is placed at fourth place behind Spotify ( SPOT ), Apple Music ( AAPL ) and Amazon Music ( AMZN ) in this report. According to MIDiA Research, the total paid subscription numbers have reached over 600 million including all the players. The music streaming industry itself is reaching a maturity phase where a large section of customer base has already subscribed to this service. Alphabet ( NASDAQ: GOOG) has invested significant resources in building its music streaming business.

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