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Coca-Cola Music Strategy Strengthened by $10M Spotify Stake

Posted by Mark J. Miller on November 15, 2012 04:15 PM

Pepsi has been marketing itself as the cola of choice for music lovers for years now, but Coca-Cola has decided to go all out in horning in on its territory this year. For the Olympic Games in London, Coke launched its “Move to the Beat” campaign, which featured Grammy award-winning producer Mark Ronson creating a catchy anthem with British singer Katy B.

Now Coca-Cola is going all-in on the music front by investing $10 million in streaming-music service Spotify, according to the New York Times. Coke, of course, likes to point out its music cred throughout its history, such as sticking its logo on sheet music way back in the 19th century, sponsoring radio shows in the early days, and creating some of the marketing world’s best-known jingles. Prominently displayed on Coke’s site right now is a contest to send lucky consumers to the American Music Awards.

"At Coca-Cola we have long recognized the power of music to connect people around the world," stated Joe Belliotti, Director, Global Entertainment Marketing, The Coca-Cola Company. "As we step up our activation through Coca-Cola Music, we are excited by the innovative music technology platform created by Spotify and the opportunity to create a truly global music network. The potential for this partnership is limitless."

Spotify’s CEO and founder, Daniel Ek, was also feeling just dandy about the partnership, which will see Spotify become the “key underlying technology for Coca-Cola Music” and be integrated into Coke’s social media offerings. “Coca-Cola is the most recognized and respected brand in the world and we are proud to be their music partner," said Ek. "Spotify and Coca-Cola both believe that music, technology and creativity can connect people around the globe."

The $10 million was part of a $100 million investment led by Goldman Sachs that had the investment firm throwing in $50 million and Fidelity Investments chucking in $15 million and the rest being taken care of by some of the previously existing investors, Digital Music News reports.

“One question is how much this now dilutes major label partners like Universal Music Group and Sony Music Entertainment,” DMN notes. “As part of exorbitant and demanding licensing agreements, Spotify offered significant shares to the now-three major labels. Prior to this round, the whisper number on that collective stake was roughly 20 percent.” 

DMN wonders if Spotify, which is facing increasing competition such as Xbox Music, could be putting itself into a position for a sale or IPO. “That sounds like a job for Goldman,” the site notes, “with Coke helping to wash it down."

Comments

WeAreAllTheBeast United Kingdom says:

Extreme Investment, Coke always going extra mile! Strong Media, Strong Results!

November 19, 2012 12:53 PM #

Comments are closed

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