What Spotify + CocaCola Means For Music

image from www.google.comGuest post by David Chaitt who works in social media advertising by day.  At night, he focuses on Music Tech organization SoundCtrl and his music food video series Backyard Brunch Sessions.

Yesterday Spotify and CocaCola announced a major partnership. Brands have taken an interesting role beyond just ad dollars at Spotify starting with its July 2011 launch.  I know this because I worked with Chevy to partner with blogs/publishers to generate editorial exposure for Spotify and Chevy in exchange for advance access to the streaming service for their readers.  It seemed only suitable that Spotify would try to evolve this symbiotic relationship with brands even further. 

During the morning talk, Spotify founder Daniel Ek made at Ad Age's Digital Conference, he kept referring to Spotify as a platform as opposed to simply a streaming service.  Depending on the brand, having a Spotify app might even be more important than having a Pinterest or Instagram account because of the emotional role music plays in people's everyday lives.  To quote a Coca-cola rep, "we're trying to develop a Coca-Cola experience within Spotify." 

On the surface this partnership sounds pretty innovative.  Coca-cola with tie Spotify into their global marketing efforts (including Olympics, FIFA, and various live events) and help Spotify launch their service in new markets.  Spotify will help Coca-Cola look cool by injecting them into the conversation of music fans.  In addition, the two partnered this past weekend to host a friendly competition between 6 different hack teams.  The winner, named "London Calling," will be an integral part of the public launch of this partnership. 

However, the whole event was presented very ambiguously and vague without going into much specifics.  Since this all was kept fairly abstruse, it's hard to ignore whether or not how the listening community will react to an even deeper branded experience when some already see Spotify ads as an interruption? 

On the flipside, Spotify insisted at the Press Event that "this is not an advertising campaign [with Coca-cola]." In addition, Daniel sited Subaru's First Car playlist as a successful brand in his Ad Age presentation by saying that the average person on the playlist listened for an average of 70+minutes.  People shared and spoke about what song defined their first car, and Subaru wins because they're at the core of conversation. 

Discovery & Amplification

I guess my gut insists that in order for the execution of this partnership to be successful, Coca-cola needs to improve the Discovery and Amplification experiences of listeners without inauthentically injecting their beverages into conversation.

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  1. So don’t use the damn service, or pay for the premium with no ads.
    I think this is great because 1. Spotify is great for music fans and 2. The more brand awareness Spotify gets the more users it will have and the more people will start to see the value in Spotify as a discovery tool.
    Go Spotify!

  2. May be great for fans, but what about ARTISTS?
    Ads or no ads, just wish Spotify would pay the music creators and performers more… seems to be running on the backs of artists.
    Don’t artists deserve to be rewarded? Those that generate the art that MOVE us need to be paid, to ensure that we keep and cultivate a growing industry of creative innovators instead of cover idol copiers. Too many talented souls are losing spirit, tossing away their gear and looking for non-music careers.
    Too many ‘experts’ and ‘consumers’ rape musicians and their right to a living and then rationalize their conduct.
    Major brands like Coke may face some backlash of being associated with this service; but Coke is a smart marketer and will likely further promote new artist development projects to help counter any criticism.
    Apparently Spotify has not launched in Canada because it will not pay the royalties; however, Last.fm has been here for a few years and seems to be doing well.
    Hoping a time will come when musicians as artists will be respected and properly rewarded… Contrary to popular myth, touring does not generate much for new artists. Perhaps we’ll need to lose more musical Van Goghs before we recognize and can address this industry’s destruction, and Spotify is surely in a privileged position to help correct this.

  3. The problem is that Spotify isn’t really in a position to pay more with its current business model. An individual user will only generate ten bucks a month in revenue, tops. That money must go towards Spotify’s costs and paying royalites for all songs played by that user during the period – hundreds of songs, maybe.
    There’s only so far you can go with such a model. The only way for Spotify to pay artists more would be for it to charge its users more.

  4. Parker, his dot-com buddies, and the major brands should ensure Spotify’s business model provides and secures sufficient funding to properly pay the artists for its content. Music should not be for free or almost free; consumers and brand marketers have to expect that “someone should pay the piper” to help keep this industry healthy and thriving.
    Commercial free music that can be programmed has a value, and it needs to be marketed properly and not on the backs of music creators. Enough of the free rides.
    Spotify must be in a position to pay more if it’s going to be ethical.

  5. Hi all
    Don’t mean to be pushy but I can’t keep up with all the posts with video links, news links, music links … well, you get the picture … so from now on I’ll post anything newsworthy here instead of typing it out … too hard for me … and the addresses to any other subjects that I think you all might be interested in. It would be nice if you did the same so I can just come here & get the updates rather than combing through all the other threads. Hope this is okay with all of you ..
    here’s one link:
    Please also visit and leave your feedbacks

  6. I would not call it innovative, it’s a high-profile major endorsement for sure, but is it more innovative than the Pepsi-Amazon deal of 2008 (that caused labels to drop DRM and move to MP3s), or any other high-profile brand endorsement of music as a driver and influencer (of which we handle hundred per year BTW)?
    Of course, one wonders, given that Spotify, as hot as it is in the press these days, is no Amazon, one wonders what is the value exchanged: Did they partner 50/50 on ads? Did one party pay the other (and if so, who paid who)?

  7. “The only way for Spotify to pay artists more would be for it to charge its users more.”
    … or for Spotify to make less… or maybe both, charge consumers more, less to Spotify, more to Artists…
    What is the Spotify business model WITHOUT artists?

  8. I’d never drink coke or pepsi, and discourage my children and anybody else from drinking it, it’s bad for your teeth and your health generally. I’d be happy to see it taken off the market forever. With regard to merging with spotify, it can only be about money, however well they dress up the deal with supposed benefits, there will only be those at the top of the organisations that will really see any benefit.

  9. I’m with Jeff on this. Our research group is still digging into the licensing outcome for artists when corporations are offered a work around for paying licensing fees.
    At some point the bleeding needs to stop. Spotify must comply with artists’ directives to take their content down, so ultimately Spotify’s viability as a leading streaming service is in the hands of the artists. This may not apply to the “major” record labels who have received an 18% equity stake in Spotify.

  10. Bad news for Spotify, I think.
    Teaming up with a mega global brand will make them massively uncool. Coke is like McDonalds or Starbucks. Just so pedestrian.
    I’m almost thinking of cancelling my subscription after hearing this… It just feels… Wrong.

  11. If Spotify isn’t in a Postition to Pay for music it should not be alllowed to use it Simplify… If I am not in a Postion to Pay for beer I dont drink it.. I dont steal it and say I am not in a position to pay for it now but I am helping get exposure for indie Beer Companies… Pleeese!

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