If the future of digital music will be shaped by mobile usage, the U.S. market could have few winners and many losers.
Insights in comScore's new "The U.S. Mobile App Report" show that only a handful of companies offer apps that many Americans use on a regular basis. Time spent on apps is highly concentrated. The average person's most-used app takes up 42 percent of total app time. The top three apps account for 69 percent and the top 10 apps get 88 percent of app time. If an app isn't in a user's top 5, it's going to get 3 percent or less of total app time.
What apps are people using most? Facebook leads in both number of monthly mobile users (115.4 million) and share of total app time (this varies by age group, but Facebook leads in all of them). Pandora is fifth in number of monthly mobile users (69 million) and ranks No. 2 in time share in three of the four age groups (it's #3 in the 55+ age group).
The rest of the list shows how two technology giants, Google and Apple, have a great opportunity to leverage mobile usage into digital music market share. Google has six of the top 25 mobile apps ranked by unique visitors in June: YouTube (2nd), Google Play (3rd), Google Search (4th), Google Maps (6th), Gmail (7th) and Google+ (16th). Google's mobile operating system, Android, also has the most app users, 76.1 million, compared to the iPhone's 62.6 million.
It's clear that Google has ample opportunity to turn Songza and its two subscription services, Google Play All Access and the upcoming YouTube Music Key, into dominant streaming services. It has the most common mobile operating system, the greatest share of top 25 apps and some of the heaviest-used apps.
But the same list shows Google has strong competitors. As already mentioned, Pandora is the 5th most popular app with 69 million unique visitors. Then there's Apple, owner of Beats Music subscription service and iTunes Radio, appears on the list with Apple Maps (9th) and iTunes Radio/Cloud (11th).
Apple is actually stronger than Google in a handful of important metrics. While users of Apple's iOS mobile operating system and Google's Android mobile operating system have the same median age, 40, Apple users have a larger median income ($85,000 to Android's $61,000) and higher average hours per app users (64 hours per month to 55 hours per month).
We already knew that mobile usage is driving digital music gains. Pandora has become more of a mobile company as it has grown in recent years. In the second quarter, Pandora got 83 percent of its listener hours from mobile devices, up from 68 percent three years earlier. Over that same period, Pandora listener hours have risen 186 percent to 5.04 billion per quarter.
We've also seen mobile usage help Spotify, a company nowhere to be seen in comScore's report in spite of having over 3 million U.S. subscribers. In May, Spotify CEO Daniel Ek told Billboard the December rollout of a free mobile app helped its recent growth, and over 80 percent of all new subscribers sign up through the mobile app. “We’ve really become a mobile-first company,” Ek said.
Of course, time spent with an app isn't necessarily a barometer of success. Take an app like Lyft, the ride-sharing company that two months ago raised $1.2 billion at a $17 billion valuation. Many Uber users will spend very little time actually using the app -- the value is derived from the transactions, not the time spent using the app.
But streaming music doesn't work like Uber. A successful streaming company will convince a large number of people to regularly spend time using its app. In the attention economy, where access replaces ownership, listening or viewing time is everything. The handful of apps that are best at capturing consumers' attention will stand the best chance of long-term success.