This month’s Verto Index looks at the top streaming music properties, from Apple Music to TuneIn Radio, among U.S. adults (ages 18 and above). The past year has been especially eventful for streaming music services: SoundCloud nearly collapsed in summer 2017, laying off 40% of its staff and replacing its CEO before it closed a last-minute funding round to stay afloat. And Spotify’s much-anticipated IPO was pushed into 2018, and then modified to a somewhat anticlimactic direct listing, which helps the company skirt a trading frenzy and other valuation issues and investor scrutiny. TIDAL, Jay-Z’s pet investment, has all but gone silent, and just this month, iHeartMedia, the parent company of iHeartRadio (the #6-ranking streaming music property on our Index) just declared bankruptcy.
Why Streaming Services Elicit Unique Consumer Behavior
Streaming music apps and websites elicit a different type of consumer behavior than other types of digital content. That’s because streaming apps and sites usually run in the background, which means the consumer interaction is passive. In other words, a typical consumer interaction involves a few minutes per session spent creating or selecting a playlist or song, which then plays in background mode for the next few hours as the consumer launches and cycles through other apps and sites.
The metrics included in this Verto Index reflect active time spent with each streaming music property, and, as a result, we also focus on metrics like the number of sessions per user, per month, as a better indicator of user engagement with a given streaming music property (in addition to our stickiness rating).
Apple Music and Spotify Battle for Dominance
Despite being a relative latecomer to the scene, Apple Music is the top streaming music property on our Verto Index, with 49.5 million monthly users (most of them paying subscribers). Spotify is a close second, with 47.7 million monthly users, although the two services have been jockeying for the top position over the past year: Spotify barely edged out Apple Music in terms of listener reach, according to our December 2017 data. Pandora is in third place, with 36.8 million monthly users, underscoring the importance of providing on-demand streaming: of the top-ranking music sites and apps, the top five all offer on-demand options, such as Pandora’s Premium product, which launched last spring. Services that offer a radio station-based format, such as SiriusXM, are less popular: the newly-bankrupt iHeartRadio is the top ranking radio-format service on our Index, but claims less than half as many monthly users as Apple Music.
What’s the Stickiest Streaming Music Service?
Stickiness is one way that Verto measures user engagement, by comparing daily users to monthly users. A high level of stickiness indicates loyal, engaged users. Our analysis of the stickiest streaming music properties shows Spotify with a strong lead: at 28% stickiness, it’s well ahead of Apple Music (19%), with users racking up an average of 61 sessions per month – or about two sessions per day. Pandora (22%) users engage in an average of 43 sessions per month, while Apple’s users account for only 12 sessions per month.
A surprising entrant into the chart is TuneIn Radio, a platform for internet radio stations that range from live sports radio to podcasts, music, and news stations. And while TuneIn Radio claims just 6.7 million monthly users, it still edges out Apple Music in terms of stickiness, with a rating of 20%.
Distinct Audiences for Spotify, Apple Music, and Pandora
According to Verto Analytics data, the top-ranking music streaming services all tend to attract relatively young audiences, but each demonstrates particular strengths among different demographic segments. Our data shows that Spotify is generally popular among men (who make up 56% of its listeners) and is especially popular among younger listeners – especially those between the ages of 18-24, who make up 26% of its overall user base, but over-index by a whopping 126% for this demographic (meaning that 18-24 year olds are 2.26 times more likely to use Spotify compared to the general population in this demographic).
This may be partially due to the fact that Spotify offers a free service tier, a well-advertised family plan, and has launched several discount programs that specifically target younger audiences, such as a recent $5 Hulu/Spotify bundle aimed specifically at students. Spotify’s popularity extends to listeners under the age of 35, but quickly drops off from there: even though listeners above the age of 55 make up 19% of its user base, they’re underrepresented by 48%.
As the only service that doesn’t offer a completely free service tier, Apple Music is generally more popular among women, who comprise 56% of its user base. And while it still maintains a relatively young audience – it over-indexes among listeners below the age of 45 (possibly a lasting side effect from the Beats acquisition), listeners between the ages of 18-24 are overrepresented by just 44%, which is low compared to Spotify’s numbers. Pandora, meanwhile, skews towards a slightly older audience: listeners between the ages of 25-34 make up the majority (28%) of its user base and are also overrepresented by 52%. Pandora also slightly over-indexes among listeners between the ages of 45-54, the only service of the three to do so.