With Starbucks deal Spotify looks to build out streaming music platform
Spotify on Monday announced a joint initiative with Starbucks that will see the world's largest coffeehouse chain stream its music in stores, promote premium Spotify subscription tiers and grant current users access to Starbucks' rewards program.
The multi-year deal aims to create a new music ecosystem that will interconnect 10 million My Starbucks Rewards members with Spotify's 60 million global users.
As part of the deal, Starbucks will promote Spotify Premium in its brick-and-mortar stores, while current subscribers can take advantage of a new "Stars as Currency" rewards system that earns points toward free drinks and other perks. Spotify is the first outside company to gain access to MSR, though it is not yet clear how customers accrue rewards under the new plan.
Interestingly, Starbucks is leaving content programming to employees. The company will supply 150,000 U.S. "partners," otherwise known as Starbucks coffeehouse workers, with Spotify Premium subscriptions to be used for generating in-store playlists. After launching this fall, Spotify users will be able to access these playlists, as well as exclusive an Starbucks music section, via Spotify and Starbucks' mobile apps.
Initially, Starbucks is looking to roll out service at 7,000 U.S. stores, with plans to expand availability to Canada and the UK shortly thereafter. The same goes for employee access to Spotify Premium.
Spotify's Starbucks deal comes amid heated competition in the streaming music industry, including a rumored offering from Apple.
At its upcoming Worldwide Developers Conference in June, Apple is widely expected to launch a rebranded version of Beats Music, possibly with exclusive content and lower monthly pricing. Negotiations are ongoing, but Apple is said to be driving hard bargains with record labels in a bid to gain a leg up over the competition.
The multi-year deal aims to create a new music ecosystem that will interconnect 10 million My Starbucks Rewards members with Spotify's 60 million global users.
As part of the deal, Starbucks will promote Spotify Premium in its brick-and-mortar stores, while current subscribers can take advantage of a new "Stars as Currency" rewards system that earns points toward free drinks and other perks. Spotify is the first outside company to gain access to MSR, though it is not yet clear how customers accrue rewards under the new plan.
Interestingly, Starbucks is leaving content programming to employees. The company will supply 150,000 U.S. "partners," otherwise known as Starbucks coffeehouse workers, with Spotify Premium subscriptions to be used for generating in-store playlists. After launching this fall, Spotify users will be able to access these playlists, as well as exclusive an Starbucks music section, via Spotify and Starbucks' mobile apps.
Initially, Starbucks is looking to roll out service at 7,000 U.S. stores, with plans to expand availability to Canada and the UK shortly thereafter. The same goes for employee access to Spotify Premium.
Spotify's Starbucks deal comes amid heated competition in the streaming music industry, including a rumored offering from Apple.
At its upcoming Worldwide Developers Conference in June, Apple is widely expected to launch a rebranded version of Beats Music, possibly with exclusive content and lower monthly pricing. Negotiations are ongoing, but Apple is said to be driving hard bargains with record labels in a bid to gain a leg up over the competition.
Comments
Welcome back "Hear Music" stores.
More like $$$ changed hands. Spotify is absolutely terrified, which tells me the AppleMusic service is going to be better than I imagined.
Now Starbuck's is dancing with Spotify, a rival of Beats, and are not playing nice with ?Pay.
How are they not playing nice with ?Pay?
Desparation. I will drop Spotify the moment Apple's Beats Music happens.
Desperation, you're crazy. That's a huge joint venture for both parties and a big win for both. I'm no Spotify fan and definitely excited for Apple has in store, but this is a smart move.
How are they not playing nice with ?Pay?
You cannot pay directly with ?Pay. You can only load your Starbucks Card using ?Pay.
What's wrong with Spotify?
You cannot pay directly with ?Pay. You can only load your Starbucks Card using ?Pay.
I think you mean one would use the iOS Starbucks app to pay right?
It wasn't necessarily Starbuck's fault, but their app has been in the news lately, and not in a flattering way due to people hacking into users' Starbucks rewards accounts and stealing money. I have zero desire to use their app. When (if) ApplePay comes to Starbucks, they'll get more of my business. Until then, it's good-ole-fashioned cash for me.
Spotify is awesome. We used the free version and it is great.
Right. It shows up in the Passport app looking like a card.
What's wrong with Spotify?
I meant to quote the person above me. I was saying this is not an act of desperation as he said.
I thought the issue was that Starbucks did not have NFC enabled equipment. I would think they wouldn't want to take the charge against the new equipment until they had to. Surely they will accept ?Pay by October when they will have to switch over to new NFC enabled POSTs.
It'll be interesting to see how merchants like Starbucks will enable chip and pin, whether they will change their POSTs to add a customer accessed terminal, or continue to take the card and offer the customers a pin pad.
It's not about whether the hardware is ABLE to work with ?Pay, it's whether the corporation behind it is willing to give up all that consumer data that they are used to harvesting.
In fact, Spotify has been available in Malaysia for some time but the take up rate is not high as most people here still prefer to download their music... But who knows, if Spotify's tie-up with Starbucks reaches here, things may change?
Interesting. I have been spending a lot of time messing around with my premium Spotify service and I have come to the conclusion that there are some features lacking that I would be willing to pay extra for meaning I would be willing to pay more than $10.00 per month for streaming service if the relaunched Beats had added functionality.
Starbucks invested heavily in their QR POS systems, as well as their app development. It's going to require another major investment to upgrade their thousands of stores worldwide with NFC Chip & Pin enabled POSTs as well so it's understandable why they are putting off the migration as along as possible. Once those systems are in place and Starbucks actually can accept ?Pay, but still don't, then we can revisit their motivation for not accepting it. But at present, it's a technological impossibility with their current equipment.
However, I don't see it in their best interest to reject ?Pay and see them supporting it as soon as they have the equipment in place to accept it. Instead they offer value added incentives to use their QR-based app. People will opt to use their Starbucks app because of the rewards it generates. I use my Starbucks App every time I visit a Starbucks because of the rewards it offers, when cash or credit card would often be quicker. Of course if they don't secure their in-house system better, customers are going to drop the app anyway.
Moreover Apple is reportedly addressing merchants concerns that they can't offer rewards incentives as part of ?Pay transactions, so once that's addressed, there's even less of a reason for Starbucks and others not to accept ?Pay.