> There is the possibility, however, that these customers might be driven to a competitor’s more lenient family plan, like Apple Music ...

No, Apple's Family Sharing goes far beyond music, which is probably more uncomfortable for people. Others being able to see the apps and books you've downloaded is generally more unfomfortable than sharing a location with Spotify.

There's a similar thing going on with Amazon Prime Video vs Netflix, because sharing a Prime password means others can see what you've bought.