By: Lara Greenberg
Three months after announcing that they would no longer be selling CDs, longtime iTunes partner Starbucks announced a brand new music partnership with music streaming service Spotify. Aiming to create what is called a “music ecosystem,” Starbucks and Spotify are working together to make music more interactive and discoverable.
Starbucks, has an impressive history of introducing new artists as well as reviving old ones. Starbucks believes that by pairing with Spotify they can expand their musical footprint. Starting this fall, all Starbucks employees will be given a free Spotify Premium subscription ($10 a month), which they’ll use to select the music that will be played in stores. Customers will also be involved. You will be able to link your Spotify and My Starbucks rewards accounts so while enjoying your Pumpkin Spice Latte, you’ll be able to suggest songs for the playlist as well as give feedback on whether or not you like a certain song.
Starbucks already has over 10 million customers signed up for their loyalty program, My Starbucks Rewards, which allows customers to earn ‘Stars’ that they can redeem in the form of a free drink or free food. As a part of the deal (and as a motivation to attract new subscribers,) Spotify is paying Starbucks for the right to give Starbucks Stars to its members which can be redeemed in stores. By allowing Spotify to give out Stars, Starbucks hopes to gain more subscribers from Spotify’s base of 60 million users.
With Starbucks need for a technological upgrade and Spotify’s need for a big partner with a musical influence, it is a perfect match between the two corporations. Spotify, facing tough competition now that artists such as Taylor Swift have removed their music from the streaming platform, is in desperate need for premium subscribers. Through giveaways such as free app and free song of the week as well as the sale of CDs, Starbucks does a pretty good job of getting people to buy other things besides coffee and as part of the deal, Starbucks will promote and endorse Spotify Premium.
This is the first time Starbucks has opened up its loyalty program to a third party. Starbucks Chief Executive Howard Schultz said, “Our long-term plan has been to create an external ecosystem with like-minded brands that will buy Starbucks stars from us and use them as a catalyst in their own business.” If it proves to be successful, i.e. attracting new, recurring, loyal customers, it will be an influential model for third party integrations.
Starbucks, which has always put music at the center of its stores, can use Spotify to fuel growth and Spotify can use Starbucks to do the same.
As a Spotify Premium and a My Starbucks Rewards subscriber, I couldn’t be happier about this new partnership. This gives people like myself an opportunity to get more out the two things they love most: coffee and music. What song will you suggest at your local Starbucks? Do you think this will be a successful partnership? As always, I welcome or comments and if you like what you read, be social and share.