In less than two years, Apple's streaming music service has managed to gain 36 million subscribers, all of them paying and currently has an approximate value of 10.000 billion dollars, which is equivalent to 1% of the total of Apple in the market, according to the analyst of Berstein, Toni Sacconahi.
According to this analyst, part of Apple Music value estimate, has obtained it through the valuation data of its maximum rival in the market Spotify, which currently has more than 70 million paying subscribers, and another 70 million users of the free version with ads.
In the same report, Toni states that the business of downloading music through iTunes has been declining, since fewer and fewer users prefer to buy songs or albums individually. This loss of income generated by the decrease in sales in digital format could not be offset by Apple's streaming music service.
Since 2014, the revenue generated by Apple's music store has been reduced by 50%. Toni affirms that the growth of Apple's streaming music service would reach 70% throughout this year, and 50% throughout next year, increasing the percentage of income that it currently generates for Apple's coffers all the quarters.
Jimmy Iovine, who leads Apple's music initiatives in the music industry, says Apple Music, Spotify and other streaming music services do not generate enough revenue to remain self-sufficient, due to the high royalty rates they have to pay to distributors. To reduce this percentage, both Apple and Spotify have reached different agreements with the music majors to reduce the percentage they pay to distributors.