Apple's revenue from its music and gaming subscription services is expected to jump 36% to $8.2 billion annually by 2025, according to JP Morgan (via Reuters). The U.S. investment bank's analyst Samik Chatterjee on Monday said Apple Music and Apple Arcade are likely to have a combined subscriber base of about 180 million by 2025, with 110 million users paying for the company's music services and 70 million for gaming.

Launched in 2015 and now the second biggest music streaming service after Spotify, Apple Music is expected to account for $7 billion revenue by 2025. Apple Arcade, which launched in 2019, is estimated to pull in $1.2 billion.

Apple doesn't break down sales in its Services category, but the company reported $19.82 billion for the March quarter. Apple's Services segment includes the App Store, Apple TV+, Arcade and Apple Music.

Article Link: Apple Music and Apple Arcade to Earn $8.2 Billion Annual Revenue by 2025, Says JP Morgan Analyst

Not to single Apple Music out, but streaming music as a whole is a broken business model.

Yes, most consumers love it and the streaming companies rake in billions, but most artists can't afford even a basic standard of living from their life's work.

For a musician to earn $1 from Apple Music, they need to have 136 streams (for Spotify, this number is 229... embarrassing).

The deal, as it currently stands, is absurdly unfair and one-sided.

Come on Tim, let's fix this

wanha said:

Not to single Apple Music out, but streaming music as a whole is a broken business model.

Yes, most consumers love it and the streaming companies rake in billions, but most artists can't afford even a basic standard of living from their life's work.

For a musician to earn $1 from Apple Music, they need to have 136 streams (for Spotify, this number is 229... embarrassing).

The deal, as it currently stands, is absurdly unfair and one-sided.

Come on Tim, let's fix this

Click to expand...

Nobody is forcing them to sign to streaming. They, however, aren’t stupid. They know streaming gets them exposure which drives concert sales, merchandise, etc.

70 million subscribers for Apple Arcade? Wow.... I assume 80% of those must be free trials.

T'hain Esh Kelch said:

70 million subscribers for Apple Arcade? Wow.... I assume 80% of those must be free trials.

Or Apple One

Not with the useless games they’ve got in the arcade , why can’t they get graphics like marvel strike force that’s in the iOS store on the atv ?

The tech specs of the atv show it’s surely got the oomph … what’s exactly holding it back ?

wanha said:

For a musician to earn $1 from Apple Music, they need to have 136 streams (for Spotify, this number is 229... embarrassing).

The deal, as it currently stands, is absurdly unfair and one-sided.

Come on Tim, let's fix this

I don’t think that’s Apple’s fault, if anything Apple is the highest paying service out there.

Apple needs to work on the Apple Arcade. Please offer better playing games. Maybe a collaboration with the EA sports will do the magic?

GeoStructural said:

I don’t think that’s Apple’s fault, if anything Apple is the highest paying service out there.

Actually that would be Tidal.

So they finally paid a high school kid $50 to add the code that lets us sort the songs in our playlists in iOS 16.

antiprotest said:

So they finally paid a high school kid $50 to add the code that lets us sort the songs in our playlists in iOS 16.

Now if only the trillion dollar company could find two spare nickels to rub together and have someone add in proper FLAC support to the Music app. It might take that high school kid all of his 45 minute lunch period.

Me thinks JP Morgan has a significant stake in Apple shares… these Wall Street jockeys predicting this stuff that far out just make me laugh… and they are always on the hunt and trying to recruit the next greater fool. I think they had something to say about bitcoin not to long ago too… i wonder if it worked long enough to unwind so they didn’t look to be the fool a many other are looking like these days…

GeoStructural said:

I don’t think that’s Apple’s fault, if anything Apple is the highest paying service out there.

Napster and Tidal pay significantly more than Apple, but that's beside the point.

Like I said at the start of my original comment, this is not about Apple Music in particular but about the failure of streaming music as a business model for artists.

We need a better model for the industry as a whole.

wanha said:

Not to single Apple Music out, but streaming music as a whole is a broken business model.

Yes, most consumers love it and the streaming companies rake in billions, but most artists can't afford even a basic standard of living from their life's work.

For a musician to earn $1 from Apple Music, they need to have 136 streams (for Spotify, this number is 229... embarrassing).

The deal, as it currently stands, is absurdly unfair and one-sided.

Come on Tim, let's fix this

Click to expand...

I agree that artists aren't getting paid enough for their music, but the solution is to increase subscription prices, introduce ads, or have Apple/Spotify subsidize Apple Music. What do you think should happen?

I'm also not convinced streaming is entirely negative. How many fringe artists now have a career because people got access to their music as part of a monthly fee they were already paying?

WiiDSmoker said:

Nobody is forcing them to sign to streaming. They, however, aren’t stupid. They know streaming gets them exposure which drives concert sales, merchandise, etc.

Did I say someone is being forced to do something?

The artists are between a rock and a hard place because they get to choose between a revenue share that is pathetic or almost nothing at all.

Considering how big a part music is of our culture world-wide, it's pretty sad that we won't compensate artists fairly.

Is this why they keep giving me 3-month free trials?

wanha said:

Napster and Tidal pay significantly more than Apple, but that's beside the point.

Like I said at the start of my original comment, this is not about Apple Music in particular but about the failure of streaming music as a business model for artists.

We need a better model for the industry as a whole.

It's not significant. Apple's average per play rate is $0.01 per stream. Tidal pays $0.013.

Is the analyst saying $8.2 billion is a good number or it's not a good number?

wanha said:

Did I say someone is being forced to do something?

The artists are between a rock and a hard place because they get to choose between a revenue share that is pathetic or almost nothing at all.

Considering how big a part music is of our culture world-wide, it's pretty sad that we won't compensate artists fairly.

Yep, the compensation model for visible public figures is all over the map. And the same could be said for doctors, lawyers, sports figures, movie stars, etc.

mnsportsgeek said:

I agree that artists aren't getting paid enough, but the solution is to increase subscription prices, introduce ads, or have Apple/Spotify subsidize Apple Music. What do you think should happen?

That's a great question.

I don't know what the answer is, but I'd love to see what happens with a web3 music service (for example, like the one Audius is building).

The idea is to basically build a streaming service like a Spotify/Apple Music, where all transactions are automatically handled by algorithms and thus there is no company in the middle owning the business relationships or taking a huge chunk of the revenue.

I have no idea whether this will work or not (we shall see), but at least there is potential there when I think that the artists could receive the majority of the $10/month instead of less than $1.

Also, this way the artist would own the relationship with the listener (on Spotify, etc the artist has no idea who listens to his music on the platform and there is no way to upsell merchandise or promote concerts, etc).

There are probably some other good ideas out there too, but that's just one I am aware of.

WiiDSmoker said:

Nobody is forcing them to sign to streaming. They, however, aren’t stupid. They know streaming gets them exposure which drives concert sales, merchandise, etc.

I read sometime ago that the Record Labels get a cut from this as well. Is that still true or has the industry changed?

Apple Music is good, but it's seen barely any innovation over the years even as it's changed from iTunes to a primarily streaming service.

Apple have not massively improved the management of large music collections, of tidying up singles and albums, of de-duping, of easily tagging music, of propagating smart playlists across devices, and even something as basic as play count across devices is broken.

Right now I subscribe because it's cheap. But that's not exactly a good reason.

Give me back my iTunes - let streaming go where ever it may go on it’s own, but give me back the best music library management tool and player there ever was… they still have the iTunes Store… why not the software too?

sorgo said:

Actually that would be Tidal.

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That's great, those 25 subscribers are probably keeping the artists out of bankruptcy.