Spotify and Starbucks Coffee Company will begin a multi-year music program to make “the barista the DJ,” in the words of Spotify CEO Daniel Ek, essentially turning over control of in-store music to the coffee makers at Starbucks’ 7,000 U.S. stores. On Monday, May 18, all of Starbucks’ 150,000 U.S. employees received a complimentary Spotify Premium subscription to prep for a planned fall in-store music program that will be powered by the streaming service, giving customers access to exclusive playlists and the opportunity to play their own favorite tracks at their local stores. The partnership will also promote My Starbucks Rewards, a loyalty program with 10.3 million members.
Though Starbucks' core business is healthy -- American sales increased 7 percent and store traffic lifted 2 percent in second-quarter 2015 compared the same period in 2014 -- the Seattle-headquartered chain nevertheless faces increased competition from Dunkin' Donuts and McDonald's, which have both enhanced their coffee offerings to reach more millennials.
“We think we have an historic opportunity to take advantage of a brick-and-mortar brand,” Starbucks chairman-CEO Howard Schultz said in a conference call Monday. “The music and business acumen Spotify has around building subscribers will enhance the music industry to provide further value for artists and reinvent the way our global customers discover music.”