Starbucks and Spotify Link Up to Bring Digital Music Into Stores

Hints at coffee chain's larger mobile aims

After ditching CDs earlier this year, Starbucks is not giving up on providing music to its customers thanks to a new partnership with Spotify. 

This fall, the two companies are teaming up to equip all employees in Starbucks' 7,000 domestic stores with free Spotify Premium subscriptions that normally cost $10 a month—the subscriptions will ultimately power the in-store music. The coffee chain's 10 million My Starbucks Rewards loyalty members will be able to stream the playlists baristas concoct and vote for what kind of music they would like to listen to, location by location. What's more, the listening and voting features can be done on either the Spotify or Starbucks app.

Spotify users will also receive points—or stars, in this loyalty program's vernacular—they can put toward earning free coffee and food. 

It's the first time Starbucks is extending its loyalty program to reward its members for doing more than just buying coffee, but it's also the latest step in building the chain's app into the go-to app for other brands.

For the past year, rumors have swirled that Starbucks is building a mobile platform that it will sell to brands looking to break into mobile payments. In September, the brand inked a deal with Uber to include a button on its app that lets users book rides. In March, mobile accounted for 18 percent of Starbucks' U.S. revenue.

"It's only a matter of time before Starbucks opens up its app and payments platform for other brands to use," said Sean Cullen, evp of product and technology at Fluent. "Over the past few years, other large organizations such as Amazon and Major League Baseball have seen tremendous success reselling capabilities built for internal use, externally."

Meanwhile, the exposure in Starbucks stores and on its mobile platform could give Spotify's subscription business a boost. The music-streaming service has 60 million users, only 15 million of whom pay for music.

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