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Coffee and streams? Spotify to serve up all music at Starbucks in new deal

Check another win for streaming giant, Spotify. Just months after Starbucks bid CD sales adieu, the coffee conglomerate announced a new partnership with Spotify to get a piece of the streaming music market. The new deal will see Spotify powering the music in Starbucks’ 7,000+ retail locations in the U.S., and will also connect with the 10 million members of the Seattle-based company’s loyalty program.

The new partnership between the brands will give baristas and customers access to curated in-store Starbucks playlists, with the ability for customers to both influence the playlists while they sip, and to listen to them after they leave the store (through either the Starbucks or Spotify apps). Ahead of the partnership, all of Starbucks’ 150,000 U.S. employees received a free Spotify Premium membership today, as well.

“What we’re really envisioning is really centered around collaborative playlisting,” said Spotify CEO Daniel Ek in a statement. “We’re making the barista the DJ.”

Another notable aspect of the partnership is the ability for Spotify subscribers to earn points through the My Starbucks Rewards loyalty card system, the first time another company has had direct involvement with the loyalty program.

“Throughout its history, Starbucks has worked closely with the music industry, offering a variety of artists a platform for their work,” said Starbucks CEO Howard Schultz in a statement. “By connecting Spotify’s world-class streaming platform into our world-class store and digital ecosystem, we are reinventing the way our millions of global customers discover music.”

At its core, though, the partnership hopes to convert Starbucks customers into Spotify subscribers at a pivotal time for the Swedish music service. Spotify currently has 60 million users, but only a quarter are paying subscribers, who bring in the vast majority of the service’s revenue. While extremely popular, the service has never been profitable in the strictest terms, and is facing increased competition in the field, including aggressive ramp ups from Jay Z’s premium music streaming service Tidal and Apple’s Beats-based service Apple Music, slated to last next month.

The program expects to launch in a “phased rollout” this fall in U.S. Starbucks locations followed by stores in Canada and the U.K..