Spotify and Coca-Cola are teaming up for a global partnership that will include a Spotify app, a Facebook integration and a 2013 marketing campaign, among other elements. "This is the beginning of something we both feel will be incredibly long-term," Spotify founder and CEO Daniel Ek tells Billboard.
The partnership was announced in a press conference following Ek's keynote speech at Ad Age's Digital Conference in New York, where Spotify was also expected to announce a new app.
Under the new agreement, Spotify will become the exclusive music technology partner for Coca-Cola Music, a global initiative introduced in 2011 as a way for the beverage company to create music programs during the "odd years" in between its sponsorship of the FIFA World Cup and the Olympics. Spotify is also the exclusive music technology partner for Coke's Timeline on Facebook, where it's the most-followed brand with over 40 million fans. A brand-new Spotify app, sponsored by Coke and developed at a New York City hacker den this past weekend, is expected to debut in the coming weeks as part of Coke's Olympics marketing efforts. Mark Ronson's "Move To The Beat" will the official anthem of Coke's 2012 Olympics campaign, and is currently being adapted for dozens of territories for this year's ceremony.
"Coke enables experiences with an artist that would never happen otherwise, and we look at Spotify like that," says Joe Belliotti, Coca-Cola's director of global entertainment marketing. "We can do things they could never do with any other partner."
One thing the partnership is not, however, is a category-exclusive sponsorship. While Coca-Cola will power its forthcoming app and buy advertising on the Spotify platform, it will not be the only beverage. Spotify, which introduced Brand Apps last Friday with partners like McDonald's and AT&T, has already partnered with Coke rival PepsiCo to develop apps for brands like Mountain Dew and Doritos.
"Spotify is a platform, and platforms are meant to be ubiquitous," says Jeff Levick, Spotify's chief marketing solutions officer. "We realized there were bigger things we could do together than just media and advertising. This is creating global scale together."
The partnership is also expected to include on-pack promotions with key Coca-Cola products as well as My Coke Rewards, offering free trial codes for Spotify to help boost new-user trials. Such promotions could further boost Spotify's presence in the U.S. since it launched with Facebook late last summer. A recent report from the New York Post pegged the music service's U.S. footprint at 3 million users and 600,000 paid subscribers, the latter figure of which was later confirmed by Billboard.biz to be reached this month.
Ek says he's "very happy" with Spotify's subscriber conversion and reach in the U.S., and hopes to add global features like a click-to-buy option for songs in the near future. "Evaluating and clearing publishing rights is more complex [in the States] than it is in Europe. We want people to have the opportunity to consume as much music in as many ways as possible. If they want to purchase a song of course they should be able to do that."
This is not the first time a beverage company has teamed with a music service for a major marketing effort. Pepsi partnered with Apple for a 2004 campaign to give away 100 million free songs on iTunes via codes on Pepsi, Diet Pepsi and Sierra Mist bottles. After months of delays in getting the bottles to market, redemptions of the songs fell dozens of millions short of the initial offering.