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Why Apple Music needs a free ad-supported tier

MacDailyNews

Nov 7

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Apple Music stands alone in the major music streaming landscape by offering no free, ad-supported tier, requiring users to subscribe from the start at $10.99 per month for individuals (or via family and student plans) to access its full catalog of over 100 million songs, spatial audio, and lossless quality. In contrast, rivals like Spotify provide a robust free option funded by advertisements, allowing non-paying users to stream music with occasional interruptions, shuffle-only playback on mobile, and limited skips—features designed to hook listeners before upselling to Premium. This ad-free mandate gives Apple Music a premium, uninterrupted experience but limits its reach among budget-conscious or casual users, while Spotify’s freemium model has fueled its dominance with over 600 million monthly active users, including 239 million on the free tier as of recent reports.

Ashley Carman for Bloomberg News:
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In June, Oliver Schusser, Apple Inc.’s vice president of Apple Music and head of subscription, was interviewed in front of a room filled with music publishers, songwriters and executives… At one point, he noted that Apple Music doesn’t have a free tier and never will. Take that, Spotify and YouTube!
But Apple’s narrow focus, while a boon for the music industry, may also be dimming its prospects with the next generation of music consumers — namely, people who can’t afford a pricey streaming subscription, particularly in developing markets.
Midia Research pointed this out in a March report assessing 2024’s subscriber growth across the industry… Overall, Midia estimated that by the end of the fourth quarter of 2024 [worldwide], Apple Music had 94.9 million subscribers compared to Spotify’s 263 million.
Tatiana Cirisano, VP of music strategy at Midia, primarily attributes this wide gap to Apple’s lack of a free tier. While eschewing free music might yield Apple a public relations win with songwriters and the like, she told me in an interview, “the flip side is you lack this funnel to adoption, and it’s also a lot harder to grow in markets outside North America and the UK, where Apple Music is the strongest.”

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MacDailyNews Take: Have you ever been forced to listen to some cheapskate’s free Spotify peppered with ads? It’s a terrible experience. Apple tries not to allow users to have terrible experiences.

The Apple Music student plan costs $5.99 per month and includes access to Apple TV+. New subscribers get a one-month free trial before the special student rate begins. At Starbucks, a 16-ounce Pumpkin Spice Latte costs $5.95.

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