Apple lost millions of Music users when trial ended; 6.5M remain

Apple lost millions of Music users when trial ended; 6.5M remain
By Jefferson Graham, USA TODAY 10:27 a.m. EDT October 20, 2015

LAGUNA BEACH, Calif. — Apple Music has convinced 6.5 million users to pay for the service, Apple CEO Tim Cook said late Monday.

Those paying subscribers are just a slice of the users who agreed to try out the service on a trial base starting June 30, suggesting millions weren't sold by the time the first three-month trial ended in late September.

But it's continued to get more of the curious to test the service. It now has 15 million total users of the service, said Cook at the Wall Street Journal’s WSJ.D Live. Besides paying listeners, the rest of that total are those using the free trial. Rival Spotify, in business since 2008, has 20 million paying subscribers.

Cook said he's happy with the results. "It's going well."

Apple Music launched in June as a $9.99 monthly service offering unlimited access to the world's music, competing with the likes of Spotify and Rdio. A month after launch, in early August, Apple said it had locked in 11 million trial members.

Daniel Ives, an analyst with FBR & Co., said the 6.5 million paid subscribers is better than he had expected and shows that Apple Music is "off to a solid start.

"Now the goal is for Apple to further spread the gospel to/convert more trial customers over the next three to six months while adding unique content and services."

Richard Windsor, an analyst at Edison Investment Research said 6.5 million paying subscribers is worth annual revenues of $780 million for Apple.

"However, how many users have forgotten to cancel the service and will do so after the first month when they receive the bill is unclear. Either way, this is pretty good performance and implies that around 60% of users who trial the service go on to pay for it."

Meanwhile, Apple has been mum about its plans to design an electric, self-driving car, despite many press reports joining Apple with companies like Tesla, Google and others who are exploring this new frontier.

At the session, Cook declined to talk about its plans, but for the first time, spoke at length about changes the automobile industry.

"When I look at the automobile, I see that software becomes an incredibly important component of the car," he said. "In the future, you see autonomous driving becoming important in the future. So a lot of the major technologies in the car shift from today's combustion engine centric kind of focus, and so it would seem like there will be massive change in that industry."

Turning to current products, Cook announced that pre-sales for the revamped Apple TV begins Monday, and that the $149 product will be available the following week.

The set-top box will bring apps to TV viewing, and offer voice control search via Apple’s Siri personal digital assistant. The current Apple TV sells for $69.

Cook said the new Apple TV is a platform that could change the way people find the shows they want to watch.

"Linear TV is going," he said. "The channel watching experience is going away."


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