Months after ending its tradition of CD sales, coffee giant Starbucks Corp on Monday confirmed the rapid growth of music streaming as it announced a partnership with Spotify Ltd.
The Swedish streaming music leader is to give accounts to its premium service to Starbuck’s 150,000 employees in the US starting this fall, allowing them to create playlists for stores.
Starbucks in turn is to promote Spotify’s premium service — which costs US$9.99 per month — in part by making the playlists accessible on the coffee chain’s own smartphone app.
The tie-up also marks the first time that Starbucks is to link its loyalty program to a third party, with Spotify users offered chances to earn “stars” that go toward free items at the coffee chain.
Through the two companies’ technological capacities, “we are reinventing the way our millions of global customers discover music,” Starbucks chairman and CEO Howard Schultz 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 favorite music,” Starbucks president and chief operating officer Kevin Johnson added.
The partnership is to start later this year at Starbucks’ 7,000 company-owned stores in the US.
Starbucks said it would later roll out the tie-up to stores in Canada and Britain.
Starbucks 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.
In 2004, Starbucks also introduced in select stores a burning service, allowing customers to select tracks to make their own CDs.
However, Starbucks in March stopped selling CDs, saying at the time only that it was exploring new options.
Last year, streaming overtook CD sales in revenue generation for the first time in the US, by far the world’s largest music market.
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