Streaming music is taking over the industry, and with over 30 million paying users, Spotify is leading the pack.
But one area where the disruption hasn’t hit to the same extent is with consumer businesses: think department stores or coffee shops. That market is still dominated by the old model, which consists of buying CDs or specialised equipment licensed for a business setting, according to Ola Sars, cofounder of streaming service Beats Music.
That’s why in 2013, Spotify quietly cofounded a startup in Sweden called Soundtrack Your Brand. The goal was to help bring the business market into the streaming era.
Since then, the startup has developed cloud-based products like “Spotify Business” and “Spotify Enterprise” in Scandinavia. But after creating its first global product, Soundtrack Your Brand is breaking into the US market, and has signed its first big global client: McDonald’s.
The new model
Soundtrack Your Brand is going after two distinct types of businesses, cofounders Ola Sars and Andreas Liffgarden, who used to head business development for Spotify, explain.
The first are small “one-store” type users. These were actually the kinds of shops that caused Spotify to begin to tinker with the market in the first place. The company began to notice Spotify popping up unlicensed in places like bars and coffee shops as far back as 2011, and started to explore how it could capture those customers.
Soundtrack your Brand’s second segment is large global brands like Starbucks and McDonald’s (both early partners in Sweden), that want both a more updated music experience and a way to control their brand across the world.
But going global has been a challenge for Soundtrack Your Brand, the founders explain. One of the main complaints from its big pilot businesses was a need to have the service in places like South Korea and Japan, where Spotify isn’t available.
“McDonald’s made it tangible for us,” Sars says. That’s why Soundtrack Your Brand has built a new global product, which is now supported by three backend services (not just Spotify). It’s called Soundtrack Business (as opposed to Spotify Business in Sweden). That service swayed McDonald’s, which has signed up to be the first global partner for the startup.
That doesn’t mean the product will roll out in every McDonald’s tomorrow. What Soundtrack Your Brand has is a “global framework agreement” that will let the company sign up franchisees. But the startup is optimistic: it has a similar deal in Sweden and over 60% of McDonald’s restaurants in the country are using its service.
Soundtrack Your Brand faces competition from entrenched incumbents and also newcomers like Pandora for Business (which has partnered with established player Mood Media). That program requires a small media player, called Profusion, which costs a one-time fee of $99. Soundtrack Your Brand doesn’t require specialised equipment.
Sars says what separates Soundtrack Your Brand is a focus on the tech side and the cloud. “We come from a different place,” he says. “A different DNA. We have 52 people and 70% are engineering and product.”
Right now, Soundtrack Your Brand is focused on becoming the top streaming service for businesses around the world. But the founders eventually want to use data to make music as much a tool for selling as things like store design.
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