In mid-February, coffee retail giant Starbucks confirmed it was to stop selling music CDs.
It was a big blow for the format: not only does Starbucks own more than 21,000 outlets across the world, but ever since buying US music retailer Hear Music in 1999, it took records seriously – selling millions of units each year and securing exclusives from the likes of Paul McCartney.
Now Starbucks is back in the world of music, but its days of shifting physical records appear to be over.
The company has confirmed that it is entering into a multi-year exclusive relationship with Spotify, initially in its 7,000 US stores but soon expanding to the UK and Canada. The US roll-out will take place this autumn.
The deal links Starbucks’ 10 Million ‘My Starbucks’ Reward members with Spotify, offering users free coffee as well as ‘unique access to Starbucks music on Spotify and the ability to influence in-store playlists’.
Perhaps more significantly for Spotify, its $9.99-per-month premium tier will be heavily promoted by Starbucks to customers.
150,000 U.S.-based Starbucks employees (‘partners’) will receive a Spotify Premium subscription – an initiative that will also be rolled out to the UK and Canada. Starbucks is believed to employ over 190,000 people worldwide.
These ‘partners’ will then be permitted to programme music in their stores using tools provided by Spotify. Their playlists will then be accessible on Spotify via the Starbucks Mobile App.
In addition, Spotify users will be able to obtain ‘Stars as Currency’ for My Starbucks Rewards loyalty programme – meaning free coffee and food.
“Starbucks has a rich music heritage… we’re incredibly proud to be their partner.”
Daniel Ek, Spotify
This represents the first time that Starbucks loyalty programme stars can be accessed by a third party.
Spotify will also include a dedicated section on Spotify featuring new playlists from Starbucks and its most popular music from the past 20 years, available to all Spotify users.
“For over forty years, music has played a vital role in Starbucks Third Place experience – inspiring our partners and customers in unexpected ways that have helped to shape the global pop culture. And we are delighted and honored to bring Spotify directly to our customers,” said Howard Schultz, chairman and CEO of Starbucks.
“Throughout its history, Starbucks has worked closely with the music industry, offering a variety of artists a platform for their work. By connecting Spotify’s world-class streaming platform into our world-class store and digital ecosystem, we are reinventing the way our millions of global customers discover music.”
Daniel Ek, CEO of Spotify, commented: “Starbucks has a rich music heritage and customers who are passionate music fans which makes us incredibly proud to be their music partner.
“Spotify has powered more than 25 Billion hours of listening around the world so far, and we’re looking forward to creating unique in-store music experiences while also making more than 20 years of popular Starbucks music available to both Starbucks customers and Spotify’s 60 Million global music fans.”
Added Kevin Johnson, president and COO of Starbucks: “We plan on building one of the most robust digital ecosystems of any retailer in the world. Given the evolution of the music industry and the proliferation of streaming technology, it was natural that we would partner with Spotify in offering our customers a new way to engage with their favorite music,”
“Starbucks ability to innovate with partners such as Spotify, creating new ways and platforms to engage with our customers, will afford us unprecedented interconnectivity across all of our capabilities, and provide new access points for Spotify as they continue to grow globally.”Music Business Worldwide
