Spotify today dominates the market for music streaming services for consumers. Now a new startup, started by Spotify’s ex-head of business development Andreas Liffgarden and co-founder of Beats Music Ola Sars — and backed by Spotify itself — wants to transform that same music platform into a B2B service.
Soundtrack Your Brand plans to sell Spotify music subscriptions to businesses like bars, restaurants, shops and other public venues. Launching today in Sweden, the company counts not only Spotify itself as an investor, but also Spotify’s own VCs Northzone, Creandum, Wellington and HMP.
According to Liffgarden, who is chairman of Soundtrack Your Brand, the idea behind the startup is to draw on the popularity of Spotify for music streaming as a way to disrupt the current market for music in public venues. “The general consensus is that two-thirds of all customers are being served by CD music in public spaces,” Liffgarden told me. “It’s a hugely interesting space to go into from a business point of view.”
And a legal point of view, as it happens: Most venues would prefer to be on the right side of the law when it comes to music royalties, he says, and they are starting to “look to streaming services to provide those solutions.” But at the same time, it’s an opportunity that Spotify itself has not tapped, since the licensing that Spotify has with labels and other rights holders restricts music streaming to individuals.
Although CDs and other physical music products (records! tapes! 8-track!) are the very old-school music service that is getting disrupted here, that doesn’t mean that there aren’t other companies also looking to provide digital music services in public venues. Other companies include Mood Media (owner of much-mocked Muzak, but also DMX and other brands), Image Sound and Play Networks.
Soundtrack Your Brand is hoping for an edge not just with the Spotify association — which is a significant edge on its own — but also added services. They include unlimited streamed music, scheduled playlists that can be customised at different venues, social features to share the music across Facebook, Twitter and stream it on your website; business support; and offline mode.
Pricing is at two tiers, 349 Swedish Kronor per month ($53) for “Spotify Business” for small and independent venues, and 799 SEK ($121) for “Spotify Enterprise,” which has yet to launch and will be aimed at larger deployments.
If Soundtrack Your Brand’s business model sounds slightly familiar to you, that’s because it is: another Nordic startup called Soundrop also once had designs on developing a legal way to stream Spotify in public venues. Since then it seems to have pivoted away from this idea to focus mainly on branded, multi-person virtual listening rooms, leaving the target of streaming in physical venues for someone else to tackle.
Enter Liffgarden and Sars, who is SYB’s CEO. “Ola and I had been trying to hire each other for a while [when one was at Spotify and the other at Beats],” Liffgarden told me. “We pitched each other a lot on the idea of what’s next in streaming music, what is the new frontier? We both thought B2B, so we decided that we needed to do this.”
For the record, any and all of my questions about Apple were met with stony silence from Sars, all the more ominous when delivered over Skype (I’m in London; they’re in Stockholm).
Liffgarden also would not comment on the relationship today between Soundrop and Soundtrack Your Brand, but we understand from another source that in fact there is a link, in that the technology in Soundtrack Your Brand is at least partly coming from Soundrop, although the startup certainly has its own cadre of developers on board working on the business as well.
As for why Spotify decided not to roll this service out itself and instead invest in a third-party to pursue the opportunity, this is not entirely clear yet, either.
It may be because Spotify itself is very focused right now on how to scale and monetise its own consumer product with premium subscriptions and advertising that diluting that with a B2B offering didn’t seem palatable. It may be that it’s simply waiting to see how well this flies first. But the fact that Spotify, along with its own VCs, has invested in the company is a sign, though, that the project is not entirely out of Spotify’s reach today and possibly even more so in the future.
We will apparently be hearing more about Soundtrack Your Brand’s bigger plans and backstory in the coming months. Listen to this space.