This past Monday (the 18th), Starbucks announced their new partnership with Spotify. If you don’t know, Spotify is a music streaming application/ software program. It’s incredibly easy to use. Open up the app, log in, and use the search bar to find music and stream it.
I think somehow I initially stumbled upon Spotify in 2011, when Spotify partnered with Klout, and gave away access to Spotify via Klout perks. I’ve enjoyed Spotify ever since. (I never even look at Klout anymore. In my book, Spotify will be way more enduring than Klout.).
You can create playlists with Spotify, have followers, and follow others. If you choose to pay for the premium Spotify, there are no ads and a few more benefits. If you’re streaming music on the free version of Spotify, every few songs you’ll hear an ad, similar to what you might expect with a radio station. The plan is that MyStarbucksRewards members who sign up to pay for the premium Spotify (about $9.99/ month) will earn stars for paying for the premium service.
Starbucks announced that they are entering into a multi-year partnership with Spotify which will allow “Starbucks MSR members unique access to Starbucks music on Spotify, the ability to influence in-store playlists as well as opportunities for Starbucks MSR members to earn “Stars as Currency.”“.
CBSnews.com reports that customers will get to act a bit like DJs, or at least suggest music for stores. It appears that the plan is that customers will be able to vote up songs for stores, and/ or make suggestions. Starbucks partners (Starbucks calls their employees “partners”) will have that ability before customers and be able to do similar things such as vote up songs and help craft the stores’ music programming from “brand-appropriate” songs.
The Spotify official blog says, “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.”
Are you looking forward to this new partnership? I wonder how this will affect the “pick of the week” song that Starbucks has done for years. Starbucks has offered a free music download via iTunes for many, many years. This is not something that I’ve ever taken advantage of because I’m not a user of Apple products. For me personally, any partnership with Spotify will be far more useful than the old iTunes pick of the week. Having said that, I certainly recognize that the iTune “Pick of the Week” free download is a well-established, popular perk for many Starbucks customers.
Please weigh in!
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When I first started at Starbucks back in the 90’s, our music was played via a special cassette tape player. I can’t remember the name of the service, but it was pre-Play Music. We got a new cassette every month in the store mail, and were supposed to return other, time-sensitive tapes when directed. I took over a store where the prior manager had figured out that if you called the music company, they would send you any tape of any genre, not just the Starbucks approved collections. At first I let my partners use the unauthorized tapes when opening and closing (no customers present), but they couldn’t resist playing the Disco Mix, or the Amazing 80’s dance hits tapes at 5 in the morning when groggy customers were startled by the loud music coming from our speakers.
The newer systems are digital, the CD’s that arrive just load new tracks onto a hard drive, then are programmed to play various collections during specific dayparts. Unfortunately, there is a minor element of being able to override the programming, so my partners were constantly shuttling to the back room to get past the Baroque or weird World Music mixes to get to something they liked.
I like the idea of more local control, allowing for local tastes to drive the music selection, but in this case the customers’ preferences MUST be allowed more weight than the partners’. I understand you’re in your store, listening to some set of repeating tracks over, and over for 8 hours per day, but it’s your job: you get paid to be there. As a former partner/just a customer, I won’t put up with inappropriate music choices from a bunch of 20 year-old partners who feel like they need to be running a dj booth at a club in order to make my beverage.
Anyhow, just my two cents (two notes?)
I really wonder what the benefit of this partnership is maybe I am missing something. How many people will pay for the premium service to get this benefit? There are times when I am sitting at my local SB and the constant repeat of the music is annoying or the selections are not what I like but then that is a personal issue of what I like in music.
@Chris – Funny you mention the Baroque era music. I really love hearing baroque classical music inside a coffee shop. In the late 1990s, maybe early 2000s, it wasn’t that uncommon to walk into a Peet’s and hear Bach violin concertos…
I kind of assume that what I want to listen to is different than a lot of 20-somethings, which you touched upon this. I have heard it said that the Starbucks demographic is now a little younger than it was in the 1990s, though I don’t know where I heard that. For a long long time Starbucks (and other big companies too) targeted men and women in their late 20s to about age 49, simply because those tend to be income earning years for many, many people. It usually translates that 30 year old and 40 year olds have a little more discretionary income and a willingness to spend it. That would make Gen X the target audience for many businesses!
@Purple1 – Spotify must make the lion’s share of their revenue off of ads – I bet most people just use the free version. It is an interesting partnership for sure. Even if you got stars for spending $9.99 a month, that still doesn’t sound very enticing to me. What if you got 2 stars per month? So that would be about 2 free drinks a year for subscribing to Spotify?
What if you already have a premium account to Spotify? How do I get free stars?
I think for the monthly you should get 6 stars each month.
@Sweetcie – I think 6 stars per month sounds good to me! 🙂
@Mary – I’m under the impression that the fine details haven’t been worked out, but I sure think you should start getting stars if you’re already an existing premium member!
About 25% of Spotify users pay for the premium service. They even crossed over into a billion Euros in revenue last year (Spotify is a Swedish company), yet lost a tremendous amount of money. In stream ads do not generate enough income to offset the royalties they have to pay to the record companies for the free users. I think with a partnership like this one, where they might be able to offer a limited time, free subscription to existing MSR members in hopes of converting them to paid listeners, is part of a broader strategy to increase their revenue through non-traditional platforms. And as Starbucks customers, we should have extra money to spend on Spotify, now that we won’t be spending it on in-store CD purchases!
Folks will probably enjoy Spotify and I venture that there will some creative methods of implementing the Barista DJ.
Sure for the customer there is the added benefit of “stars”, but the real benefit is to Starbucks. Spotify will provide a whole new world of user information to Starbucks that Starbucks Marketing will use to push promotions/ads.
What remains to be seen is what will happen to the Apple Starbucks relationship. Is Howard going to burn another bridge? Many Tech and Financial Blogs think so. My opinion is stay tuned.
@dadcooks don’t be worried about the apple partnership. Each store is getting a minimum of one hand held device for inventory purposes. If anything, the partnership is stronger than ever!!!!!