from Statista.com
— this post authored by Felix Richter
A little more than 10 years ago, in October 2008, Spotify launched its music streaming service in parts of Europe, marking the birth hour of what is now the most popular way of consuming music.
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As the following chart illustrates, the music landscape looked radically different in 2008 compared to today. Back then, physical formats, predominantly CDs, accounted for 70 percent of global music revenues, streaming was still in its infancy and even digital downloads had yet to reach their prime.
According to IFPI, streaming accounted for nearly half of global music revenues last year (and even more in the U.S.), making it the biggest source of income for the music industry by a significant margin. As market leaders Spotify and Apple Music continue to grow, it is all but certain that streaming will dominate music consumption going forward, especially considering that many of today’s and most of tomorrow’s listeners have grown up without a CD player and probably consider an iPod a relic from a long-forgotten time.
When Apple launched Apple Music in June 2015, many people thought it would be a question of ‘when’ rather than ‘if’ Apple would catch up with and eventually surpass Spotify. Apple’s financial and marketing power combined with an installed base of hundreds of millions of iOS devices seemed like a tough combination to beat for the Swedish music streaming pioneers.
And yet, ever since Apple launched its own streaming service halfway through 2015, Spotify has managed to keep Apple Music at arm’s length. If anything, Spotify appears to be pulling away from Apple Music in terms of paid subscribers. As the following chart illustrates, the gap between the two streaming services has gradually widened from 20 million when Apple Music was launched to more than 40 million subscribers by the end of 2018.
As Spotify reported in February, the company that went public in a private listing last year now has 96 million paid subscribers and 207 million monthly active users across its premium and ad-supported tiers. In line with its European heritage, Spotify is most popular across the old continent with 40 percent of its premium subscribers located in Europe. North America, the home turf of its fiercest rival Apple Music, is Spotify’s second largest market, accounting for 30 percent of premium subs.
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