Of all the partnerships under discussion at the moment, ones that involve music are the most compelling. It is a classic ‘win-win’ deal. The music business was in deep trouble, the digital revolution leaving vinyl records in pieces on the streets and music companies in similar straits. Now, through partnerships the music industry is enjoying a resurgence on many fronts.
They have partnered with operators around the world. Deezer, although not alone, is leading the way. They have partnered with Orange, Tigo and T-Mobile. In each case they have seen very positive results. When they are bundled with operators’ plans churn is reduced across the board – a 60 percent reduction in the case of Orange. In the case of Tigo, there was a 43 percent positive impact on acquisition rate – because of the tie up with music. Indeed, the vast majority of music – about 80 percent – is now streamed to mobile devices.
These partnerships do not just involve music streaming companies and operators. Music streaming companies are also teaming up with retailers.
Music with coffee makes perfect sense, and Starbucks and Spotify have teamed up to use music to increase loyalty. Available on both the Starbucks and Spotify apps, customers can download from playlists and take the music with them when they leave the café. If customers get their selection on the Starbucks’ playlist, they receive extra benefits. For Starbucks it makes their loyalty program more compelling – more real. For Spotify it gives them a potential audience of 10 million My Starbucks customers. Spotify also has a partnership with Uber. More partnerships will come to light over the next few weeks and months.
Music is not, of course, the only partnership that makes sense for operators but it does illustrate very well how these partnerships can – for the moment – reduce churn, drive take up of services and, finally, get operators beyond the opaque practice of selling data.
Although there is no clear path to extra revenue coming from these partnerships, there certainly will be. In the meantime, reducing churn and increasing subscriptions cannot be a bad start.
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