Swedish Spotify teams up with US cafe chain

AFP/The Local
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Swedish Spotify teams up with US cafe chain
Spotify will allow Starbucks to create playlists for its stores. Photo: AP Photo/Ted S. Warren

Starbucks customers could soon be listening to Spotify lists as they sip their lattes, after the coffee giant announced a new partnership with the Swedish streaming leader.


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The move is being rolled out in the United States and will eventually make its way across the Atlantic, the company said on Monday.

Spotify will give accounts to its premium service to Starbucks' 150,000 US employees in autumn, allowing them to create playlists for stores.

Starbucks in turn will promote Spotify's premium service – which costs $9.99 a month – in part by making the playlists accessible on the coffee chain's own smartphone app.

Despite facing some competition from new streaming services such as rap mogul Jay Z's Tidal, Spotify remains the market leader in music streaming, with 60 million users in 2014, compared to 36 million at the end of 2013.

However, earlier this month Spotify announced that it had tripled its net losses in 2014 – up to 1.5 billion kronor ($182 million) from 46.1 million in 2013 – although the company put the losses down to heavy investments.

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The new tie-up makes the first time that Starbucks will link its loyalty programme to a third party, with Spotify users offered chances to earn “stars” that go toward free items at the coffee chain.

“We are reinventing the way our millions of global customers discover music,” Howard Schultz, the chairman and chief executive officer of Starbucks, said in a statement.

“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 favourite music,” added Kevin Johnson, president and chief operating officer of Starbucks.

The partnership will start later this year at Starbucks' 7,000 company-owned shops in the US. It will later roll out the tie-up to cafes in Canada and Britain.

Starbucks, which owns 10 stores in Sweden, was once seen by the music industry as a great hope for selling CDs, with a selection offered on racks as customers waited for their coffees. But in March the company stopped the venture, saying that it was exploring new options.

Streaming has caught on at different paces around the world, with the tech-savvy Nordic countries rapidly embracing it. In the US, by far the world's largest music market, streaming overtook CD sales in revenue generation for the first time. However, CDs remain the preferred format in countries such as Germany and Japan.


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