Does it make sense to compare the music industry’s streaming platforms to Netflix?
The jury’s out – not least because the platform’s been able to take advantage of an existing ‘rental’ mentality amongst TV and movie consumers, as well as converting its previous physical customers into streamers.
But the fact remains that the company’s numbers are something to which the music industry’s platforms must aspire; especially ‘pure-play’ music streaming firms like Spotify and Rdio. (Apple, apparently, sell a few devices now and again.)
According to Netflix’s financial results for Q2 – the three months to end of June – the movie and TV service added 3.1m subscribers in the quarter to hit 62.7m paying users in total.
That represents a 30.6% rise in paid-for subscribers over the past year.
Netflix now forecasts that it will increase the rate of growth in its paying subscriber base in Q3, up by 3.9m to 66.6m.
Netflix doesn’t offer a ‘freemium’ tier like Spotify – instead it limits users to a month’s free trial, after which they can choose to sign up.
The difference in blue and green bars in the chart below, therefore, is the number of people actively using a month’s free trial (or presumably a company-issued sub).
Despite this growth in subscriptions, Netflix slightly missed its Q2 revenues and profit expectations.
Revenues rose 23% from last year to $1.64 billion, while quarterly net profit hit $26.3 million, down 63% from $73m YoY.
Spotify’s latest subscriber count gives the company 75m users with 20m paying subscribers.
According to IFPI data, the global music industry attracted just 41m paying subscribers in total in 2014.
Read: Has music missed its Netflix moment?Music Business Worldwide
