Morgan Stanley: Spotify is huge in key demo. Apple Music is an also ran

From a note to clients by analyst Benjamin Swinburne that landed on my desktop Monday:

Forever Young - generational shift in listening driving share shifts: Reported listening share for leading digital platforms increased while broadcast radio fell. SiriusXM (paid), Spotify (freemium), and YouTube (free & paid) saw increases in listening share YoY. These increases largely came out of AM-FM radio, which saw its reported listening share fall 300 bp to a still leading share of 36%. Listening behavior varies widely by age with Spotify garnering the largest reported listening share among 18-29 year olds at 21%, more than 2x Apple Music's reported share. This compares to over 50% share for broadcast radio among 65+, for example. While we estimate that ~50% of the US smartphone market subscribes to a paid streaming service today, the challenge for Spotify and other paid services is migrating free users to pay. While YouTube's reported listening share is similar to Spotify's, its 60% reach among the survey highlights the popularity of ad-supported music streaming on the world largest content platform.

Survey shows Spotify building an even more engaged, satisfied customer base: On-platform listening share, or the % of listening on Spotify by Spotify users, increased to 30% in this year's survey which is second only to SiriusXM. Reported hours listened on Spotify among Spotify users increased ~25% to 4.2 hours per week, also second only to SiriusXM. Spotify also moved into an effective tie with SiriusXM for #1 in overall listener satisfaction. Spotify's in-car listening share across all respondents remains low but is moving in the right direction, up 300 bp to 10% share. Finally, we note that Spotify's paid penetration of iOS and Android smartphone users moved up and was in-line with and ahead of Apple Music and YouTube Premium's penetration, respectively.

Cue the charts:

My take: Most of the people my age listen to the radio. Morgan Stanley doesn't care. It likes Spotify.


  1. Robert Paul Leitao said:
    It’s good for Apple to have real competition in the market for paid subscription music services. Where Apple Music has no competition is in my home. I stream music through multiple devices including HomePods and Apple TVs. It’s one component of Apple One and subscribing to the Premier plan I can offer Apple Music, Apple TV+, Apple Arcade, Apple News+, Apple Fitness+ and share 2TBs of iCloud storage with up to 5 other family members at no additional cost. More things in life should be this simple. It’s a bargain at $29.95 per month especially in highly inflationary times.

    December 20, 2021
  2. Steven Philips said:
    Most of the people my age are deaf!
    However – when I want to (try to) listen to music I don’t want DJs, I don’t want ads and I don’t want music I don’t care for. So I just listen to my own!
    I know I might miss a bunch of good contemporary music – I do pick up bits and pieces – but I’m really too old to care much.

    December 20, 2021
  3. Steven Philips said:
    Agree with RPL. When a few things settle out I will probably go for Apple Music or Apple One. As a single, many things lack the value that they hold for families.

    December 20, 2021
  4. Robert Varipapa said:
    Apple’s subscribers appears to approach Spotify’s paid subscribers.
    I have Apple One and a free Spotify account (mainly to transfer play lists with SongShift as many sites only provide Spotify play lists.)
    Heard Spotify is having trouble getting GenZ users to sign up (and suspect Apple may be too.(

    December 20, 2021
  5. Gregg Thurman said:
    The only time I listen to music is while driving, and then it’s on 107.1 AM, a listener supported (voluntary $10/month) radio station. It plays ‘50s, ‘60s and early ‘70s music virtually commercial free, and very little DJ time except to provide tidbits about the artist playing. There seems to be just one DJ, so I’m guessing it’s all digitally compiled and pre-recorded

    December 20, 2021
  6. Darren DMW said:
    I’m a big fan of Apple Music and would listen to at least 25 hours a week of music. It still has some quirks and bugs that need ironing out.

    Most of my friends are on Spotify and they also love Spotify. My friends with deep musical interests who have tried both services insist Spotify sends better personalised playlists/recommendations.

    No doubt Spotify is executing very well and their lead may be unsurmountable. But I am pretty sure that if apple gets majority share on iOS then that will be a WIN. This report does not say if that is the case or not, my guess is its close to 50:50 in USA on iOS.

    Apple ONE will continue to be more meaningful for more people. In the end I think Apple will find a user base that they are happy with.

    Apple plays the long game and you bet against them at high risk.

    December 20, 2021
  7. Darren DMW said:
    Posit – a strong Spotify is good for anti-trust rebuttals.

    December 20, 2021
  8. Kirk DeBernardi said:
    Boy, those 18-29 year olds also love free, don’t they?

    Free is growing? Shocker.

    Apple Music stuck a knife in rampant MP3 file pirating at the get-go of digital music (“your competition is free”), has avoided the ads crutch and has supported compensating artists from day one. Not a shocker.

    December 21, 2021
  9. Romeo A Esparrago Jr said:
    “ The monopoly you’re looking for isn’t here. Move along. “

    December 21, 2021
  10. In a friendlier regulatory environment, SiriusXM would be a takeover target, for any of the digital music providers. I’ve heard there’s a poison pill in place though. Satellite receivers are factory-installed in most car models now, as is CarPlay, Tesla excepted. Satellite connections will be a part of AEVs moving forward.
    An analyst discussing Apple mentioned their need to acquire more video content providers, suggesting they may buy a studio. Relationships with the firm tied to Reese Witherspoon helped but to compete with Disney, NetFlix, HBO, etc. Apple needs to buy more content. I expect they will in 2022.
    Disclosure: I’ve subscribed to XM since it’s inception. I’m often in my motor vehicle but the anywhere app, traffic, comedy and participation of many performers including Tom Petty, RIP and Niel Young keep me awake & tracking those sats to this day.

    December 21, 2021
  11. bas flik said:
    i use qobuz and tidal. they allow 10mbps streaming.
    music streamers all loose money. not good business. 15 euro a month you can listen to millions of albums. before you paid thousands a year.

    December 21, 2021

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