Apple and Spotify are generating $7 billion a year in streaming music revenue


60 million subscribers a year.

It took the music industry more than a decade to embrace streaming music. Now it’s a thing.

More precisely: It’s at least a $7 billion-a-year business.

That’s what you get when you combine the 40 million paying subscribers Spotify reported earlier this fall, and the 20 million Apple announced Tuesday, and do some (very) basic math, assuming each subscriber is paying around $10 a month.

We’ll have a better grip on those numbers if Spotify goes public next year, and we can see what it really makes per customer. But for now, let’s assume we’re in the ballpark.

Here’s what we can say about the ballpark:

Pro: Pretty good ballpark! For years, lots of people, including me, assumed it would be very difficult to find 60 million people around the world who would pay $120 a year for music. Not when music is so easy to get for free, and not when there are so many other things to spend $10 a month on.

Con: We’re still a long way from the Napster era peak in 1999, when the music industry grossed $40 billion worldwide. And we will probably never get back there — because music is so easy to get for free, and because there are so many other things to spend $10 a month on. Equally important: It’s unclear whether companies that only sell music — like Spotify — can be a going concern, given industry economics. Again, we may get an answer to that next year.

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