Starbucks and Spotify Team Up For Multi-Year Music Program
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Starbucks Coffee Company and Spotify have teamed up in a multi-year music program that makes the “barista the DJ”.
Daniel Ek, CEO of Spotify, is basically allowing the coffeehouse company to run the in-store music. Starbucks. On Monday, every employee of Starbucks – about 150,000 got a complimentary Spotify Premium subscription to get ready for the anticipated fall in-store music program that the streaming service will power. It will provide customers access to exclusive playlists and the chance to create their own track list at their locations.
The partnership is set to promote the company’s loyalty program “My Starbucks Reward”, which has 10.3 million members. While the core of Starbucks business is sufficiently healthy, the company faced stiff competition from McDonald’s and Dunkin’ Donuts. The two companies have branched out with their coffee offerings to get more millennials.
Howard Schultz, chairman-CEO of Starbucks, said the company has an historic opportunity to cash in on the brick and mortar brand. The business insight and music Spotify has in building its subscriber base will boost the music industry to give additional value for artists and change the way customers – around the world – find music.
This is not the first time Starbucks has venture into the music industry. In 2006, it had an agreement with Apple iTunes to provide 1.5 million free downloads every year, shining light on a different artist every week.
In 2007, the “Hear Music” label was created in conjunction with Concord, ensuring that albums from Joni Mitchell, Paul McCartney and James Taylor hit the Billboard 200. The company scaled the HearMusic program in 2008, and with decreasing sales, the chain quit selling CDs altogether this year.
The key purpose of this new pact isn’t about boosting certain label-sanctioned artists. Instead, Schultz is looking at it as the first third-party app for people to get “Stars as Currency” – or free drinks and food through the My Starbucks Rewards program, while Ek thinks a good way to bring paid subscriptions. There are 60 million active users on Spotify, with 15 million paying subscribers.
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