Engagement & Retention project | Apple Music
What is Apple Music, in brief? 🎵
For Consumers (Listeners): Apple Music - Over 100 million songs.
Apple Music is the ultimate music streaming platform where users get unlimited access to 100 million songs, thousands of curated playlists, and original content from their favourite artists – all ad-free.
For Artists: Apple Music - The home for artists
Apple Music for Artists is the official app that empowers artists with insights to help build their audience and reach new fans.
For the scope of this project. I will primary be focusing only on Apple Music app, that is for consumers (listeners) and not the one that is for artists. Last year, Apple also released Apple Music Classical, we won't be focusing on that too for this project.
Why choose Apple Music? 🤔
Product Selection Framework
Criteria | Response |
|---|---|
Internet first product? | Yes ✅ |
Post PMF? | Yes ✅ |
User Base |
|
Retention? | 62% subscriber retention rate [1] |
Market Leader? | No ❌ US: 2nd biggest streaming service [2] Europe: 3rd biggest streaming service |
Revenue | $9.2 billion (2023) |
*As of Aug 2024, Airtel Wynk has shutdown and all Wynk premium users will be offered Apple Music subscription for free i.e potentially adding more 500K users resulting in Apple Music becoming 3rd biggest streaming service in India with a total of 700K subscribers.
It is clear that Apple Music is promising and a well loved product, more than half of it's subscribers never leave the app but there's still a lot of improvement. Especially in India and also I will be focusing mainly on Apple Music India:
- As an app that is growing YoY and especially in India there will be a huge spike in growth after shutdown of Wynk, it is essential for Apple Music to have a strong retention rate.
- On top of that India accounts for 14% of global audio and video streaming and bagging the position of world's 2nd largest streaming market. [4]
- India's streaming market is at a 81% YoY growth
- iPhone sales in India are rising constantly, in 2023 Apple's revenue from India grew 42% to $8.7bn [5]. This directly correlates to increase in Apple Music's Revenue and every new iPhone user gets a free trial for Apple Music
Let's understand Apple Music in detail 🎯
- What is the core value prop of Apple Music?
"Apple Music delivers a high quality, seamless and personalised music experience, all ad-free."
Let's understand the 'why' behind each adjective used in the CVP:
- High quality music:
- All music listeners want to listen to good high-quality music, Apple Music promises them this with Spatial Audio and lossless audio. This is something that differentiates Apple Music from other competitors, even Spotify the biggest competitor of Apple Music still don't offer these features.[6]
- Apple also has an advantage over other companies as it can provide an end to end experience for music listening i.e the Apple AirPods (entire series) are optimised to work better with Apple Music and provide a better sound quality.
- Seamless experience:
- No one can beat Apple at their own ecosystem, Apple Music listeners will always have a seamless experience of listening to music on any of their Apple devices, all synced in.
- Going for a run with your Apple Watch? Same Apple Music.
- Sitting to work on your Macbook? Same Apple Music.
- Having a party and using HomePod? Hey Siri, open Apple Music.
- On top of this, Apple Music offers 100M+ songs, user can listen to any artist of their choice - online and offline, both ways.
- Personalised experience:
- Apple Music aims to provide a personalised experience to each user, as it can be seen on their app:
- 'Top Picks for You'
- 'Made for You'
- 'Stations for You'
- 'Find Your Mood'
- 'New Releases for You'
- 'Replay: Your Top Songs by Year'
- 'Shared with You'
- On top of this, Apple Music bets big on geographical level personalisation through country wise and city wise curations.
- Ad-free:
- Apple Music wants to clearly convey to the user that their experience will never be interrupted by ads, maintaining Apple's premium branding. This is different from freemium model used by a lot of competitors.
- How do users currently experience that core value prop repeatedly?
Core Value Prop | Apple Music Subscriber |
|---|---|
High quality music |
|
Seamless experience |
|
Personalised experience |
|
Ad-free |
|
- What is the natural frequency of Apple Music's core product?
Listening to Music
Feature | Casual | Core | Power |
|---|---|---|---|
Listening to music in form of
| Once or twice per week | Once per day | Multiple times per day |
Listening to playlists:
| Once or twice per week | Once per day | Multiple times per day |
- Does Apple Music have other sub-products? What is their natural frequency like?
Feature | Casual | Core | Power |
|---|---|---|---|
Creating playlists | Never / Once during their entire subscription | Once in a couple of months | Once in a month |
Listening to radio
| Never / Never heard of | Never / Once per year | Once in a couple of months |
Watch interviews | Never / Never heard of | Never / Once per year | Once/Twice in a year |
Add music to library (music includes songs, albums & playlists) | Once/Twice in a month | Once/Twice in a week | Once/Twice in a week |
Favourite a single/artist/album/playlist | Once/Twice in a month | Once per weekly/bi-weekly | Once per weekly/bi-weekly |
Download music (music includes songs, albums & playlists) | Once in a month AND also depends on need | Once per weekly/bi-weekly AND also depends on need | Once per weekly/bi-weekly AND also depends on need |
Using Apple Music Sing | Never / Once during their entire subscription | Once in a couple of months | Once in a couple of months |
Watch/Listen to Live Music | Depends | Depends | Depends |
Using SharePlay or sharing music with friends/family | Once in a couple of months | Once in a month | Once per weekly/bi-weekly |
Using Siri to play music | Once in a couple of months | Once in a couple of months | Once/Twice in a month |
- What is the best engagement framework for Apple Music?
Depth - Time
Why not Frequency or Breadth? →
Engagement Framework | Metric(s) to be tracked | Selected | Reasoning |
|---|---|---|---|
Frequency | Avg. no. of sessions per user per week | No ❌ |
|
Breadth |
| No ❌ |
|
Depth |
| Yes ✅ | Reasoning given below ↓ |
Why Depth?
If a user spends more time on the app (session duration) AND uses the app more times (no. of sessions) then Apple Music will be able to give them a better experience:
- More personalised recommendations: The more time a user spends on the app, the more Apple Music would learn about their listening habits and the better curations they'll be able to make
- Higher engagement of users will attract more artists to produce exclusive content for Apple Music
- Also, the more users listen to an artist → the more they'll earn → the more create new music, thus creating a loop
- Users will be able to discover new artists and new music of their liking if they spend more time on the app
- Higher session duration will lead to user sharing more songs with their friends which would then potentially help with new user acquisition
Note: When we're optimising for avg. session duration in depth framework for Apple Music, we should not just focus on user using the app actively, we should also optimise for user using the app in background.
- What makes someone an active user of Apple Music? What is their natural frequency?
For Apple Music, an active user is a user who uses the app on a regular basis (could be daily, weekly or even monthly) and has an average session duration >= 10 minutes.
Why this?
Any user who comes back to the app on a time to time basis signifies they find value from the app and avg. session duration >=10 minutes shows that they don't just come back to the app for the sake of it, they're able to fulfil their need of listening to music. (Assuming, avg. song length being~ 3 min, they listen to 2-3+ songs on an average.)
Natural Frequency :
- Casual - Once or twice per week
- Core - Once a day
- Power - Multiple times in a day
Step 1→ Understand
Bird's eye View
Information available publicly (as per external sources):
- Total Subscribers of Apple Music: 93 Million
- Overall Retention Rate: 62%
Let's recall something, the definition for an active user of Apple Music was: "A user who uses the app on a regular basis (could be daily, weekly or even monthly) and has an average session duration >= 10 minutes."
Therefore, total active users would be: ~80% of Total Subscribers = 0.8*93 million = 74.4 million users
On the basis of the data available to us, industry standards and competitor data, we'll be calculating other important metrics for Apple Music:
In the data available online, it is not mentioned what's the time range for 'Overall retention rate' but we'll assume it refers to long-term subscribers (either 6 months or 1 year). This is because Spotify's overall retention rate (i.e 1 year) is around ~ 75-80%. Also, annualised churn rate of Spotify is 30.9%.
- Daily Active Users (DAU):
- Assumption: Industry standard DAU/MAU (Stickiness ratio) is around ~ 20-30%, Spotify being the app's biggest competitor releases similar engagement data. We'll be assuming a stickiness ratio of 25% for Apple Music.
- Calculation:
- MAU = ~70-75% of total active users = 0.7 * 74.4 million = 52.08 million {We can assume that 70% of active subscribers would be MAU as they're paying for the subscription and we've factored in churn, inactiveness and industry standard}
- DAU = MAU * Stickiness Ratio
- DAU = 52.08 * 0.25 = 13.02 million users
- Monthly Active Users (MAU):
- As we discussed in previous step, MAU = ~70-75% of total active users = 0.7 * 74.4 million = 52.08 million
- D0 Retention:
- D0 retention would be = 100%
- D7 Retention:
- As per industry data, D7 retention is around = ~90-95%
- D30 Retention:
- D30 retention would be around = ~75-80% (this is comparable to Spotify's D30 data)
- D60 Retention:
- D60 retention would be around = ~65-70%
- D90 Retention:
- D90 retention would be around = ~60-65%
This shows that around D90, the retention curve stabilises and flattens leading to an overall retention rate of 62%.
Retention data:
Retention Curve:
Factors considered while calculating the above metrics:
- Most users when buy a monthly subscription, in a highly engaging app like a music streaming app the biggest drop-off takes place after the 1st month i.e D30.
- All the calculations have been done while keeping the definition of 'Active user' in mind.
- All the calculations are according to industry standard data while being less than Spotify's metrics because it has been observed that Spotify reportedly has a better retention rate than Apple Music.
Summary:
KPI | Users | Percentage |
|---|---|---|
Total Subscribers | 93 million | 100% |
Total Active Users | 74.4 million | 80% |
DAU | 13.02 million | 14% |
MAU | 52.08 million | 56% |
D0 | 74.4 million | 100% |
D7 | 70.86 million | 95% |
D30 | 58.03 million | 78% |
D60 | 52.08 million | 70% |
Microscopic View
- Which ICPs drive the best retention?
The ICP 1 and ICP 3 would drive the best retention.
Why ICP 1?
- These users are power users of Apple Music without any major pain points
- When we look at competitor's (Spotify) retention data, Student plan has a pretty strong retention rate.
- ICP 1 has multiple use cases, they have a good average session duration and they use a lot of features.
Why ICP 3?
- These type of users have the Family Plan, again as per competitor's (Spotify) retention data Family plan has one of the highest retention rate.
- In a family plan, churning off is a difficult decision as there are multiple stakeholders.
- What channels drive the best retention?
- Apple ecosystem - Difficult for users to churn off when they're part of a whole system and each product become better value wise when used with other products
- What sub-features or sub-products drive the best retention?
- Spatial audio and lossless audio
- Personalised playlists
- Download music
- Exclusive live events, interviews & content
Step 2→ Define
Reasons for Churn
Reason | Category |
|---|---|
Alternative Music Service subscription available at a cheaper price | Voluntary |
Disliked recommendation system | Voluntary |
New music discovery found difficult | Voluntary |
Did not like the personalised playlists | Voluntary |
Glitches and app issues like downloaded music got removed automatically | Voluntary |
Didn't find value for price | Voluntary |
Not eligible for Student plan anymore so discontinued | Involuntary |
Family decided to unsubscribe | Involuntary |
Negative Actions
- Decrease in frequency of app usage
- Decrease in avg. session duration or avg. listening time
- Giving low rating/review
- Checking out the unsubscribe flow
- Mute notifications from the app
- Remove widget from Home Screen
- Removes supporting apps access (eg: PS5)
- Decrease in downloads (only if there were a constant no. of downloads per week before)
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