Just In Time: Spotify Inks Music Deal With Starbucks

Spotify just inked a major deal to try and preempt Apple’s entry into the streaming music market. No, the deal is not with Taylor Swift or some other big-name artist. It’s with Starbucks.

Under the new deal, Spotify will power the music that plays in 7,000 of Starbucks retail locations in the U.S. It also aims to help fuel a boost in Spotify’s subscriber numbers by giving free premium subscriptions to 150,000 Starbucks employees and offering incentives for customers to sign up as well.

Spotify subscribers will also be able to earn points through the My Starbucks Rewards loyalty card system, which is the first time a third-party company has had this level of involvement in the coffee giant’s loyalty program.

The deal also turns baristas into DJs: Spotify will provide Starbucks employees with the means to influence the in-store playlists with specialized tools.

The deal comes at a pivotal time in the evolution of the music industry. Symbolically enough, it is the first major music announcement Starbucks has made since it stopped selling compact discs in its stores in March of this year. And it comes just one month after digital music revenue eclipsed physical music sales for the first time.

This is also crucial timing for Spotify. Currently the dominant music streaming service, the Swedish company has seen its competitors proliferate in the last few years. Google is now running two music subscription services of its own. Next month, Apple is expected to drop a potential bombshell on the streaming music industry with the launch of its own iTunes-branded streaming service, built atop the guts of the Beats Music service it acquired last year. And this afternoon, Jay Z’s premium streaming music service, Tidal, teased a new music video from Beyoncé and Nicki Minaj—which, to the displeasure of many fans, is only available with a subscription to Tidal.