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Spotify revenue in Europe is quickly catching up to iTunes


With no shortage of ways to listen to music these days, the drive to own one's music is no longer as prominent as it once was. Indeed, the rollout of iTunes Radio last summer underscores Apple's appreciation for a musical landscape that's markedly different than it was even just five years ago.

This isn't to say that folks aren't spending money on music. On the contrary, it seems that subscription services like Spotify are now generating enough revenue as to compete with the iTunes juggernaut.

On this note, The Guardian last week relayed portions of an interview that Spotify's Kevin Brown conducted with Music Week.

"Some of our partners are saying Spotify is now generating more revenue each month across Continental Europe than iTunes..."

"Given that download sales are declining and Spotify is growing rapidly, particularly in the UK, it is only a matter of time before Spotify is bigger than iTunes across Europe as a whole."

What's particularly interesting is that many of Spotify's new customers, according to Brown, aren't using Spotify as an ad-supported service, but are rather putting down cold hard cash for subscriptions.

With digital downloads undeniably on the decline, coupled with a discernible rise of consumers choosing to get their music fix from sites like Pandora and Spotify, Apple arguably needs a more compelling offering than iTunes Radio to keep users within the lovely confines of the Apple ecosystem.

Apple, though, doesn't appear to be oblivious to the matter. To wit, Beyonce's most recent album was initially released as an iTunes exclusive and wound up netting nearly 830,000 downloads in the first three days following its release. What's more, just two of the album's tracks are currently available on Spotify, clearly encouraging users who want the album to head over to iTunes.

While getting iTunes exclusives may not be a problem in and of itself for Apple, the real challenge lies in finding artists popular enough as to make the "iTunes exclusive" gambit worthwhile.

As a final point, Billboard recently reported that Apple may be contemplating a music subscription service of its own.

Apple has opened exploratory talks with senior label executives about the possibility of launching an on-demand streaming service that would rival Spotify and Beats Music, according to three people familiar with the talks. Apple is also thinking about adding an iTunes App for Android phones, the Google rival that has been growing faster than the iPhone, these sources said. The surprising discussions are part of a multi-pronged strategy to deal with the double-digit decline in U.S. download sales at Apple's iTunes Music Store, the largest music retailer.

All in all, it's interesting that Apple, a company that spearheaded the digital music revolution, may soon find itself playing catch-up to more recent services.

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