In today’s world, social networking has become an essential part of our lives. Companies like Facebook, Instagram, Snap, YouTube, and others offer various programs to bring creators and brands together. And now, joining this trend is Spotify with its new in-house “music advisory agency” called AUX.
The aim of this program, as Spotify claims, is not to create a marketplace for creators, but to connect brands with emerging artists for mutually beneficial campaigns. This partnership will not only help artists gain exposure, but also provide Spotify with another source of income. Brands will pay the music platform to leverage this new service.
“Noise is powerful. Music, by its very nature, has an unshakable sociability.” – Peggy Gou
Coca-Cola is the first client of the AUX consultancy. The beverage company has collaborated with Berlin-based DJ, producer, singer, and songwriter Peggy Gou to establish a long-term partnership. This collaboration includes live concerts, events, social media content, a branded playlist, and on-platform promotional support.
This move showcases a more proactive approach from Spotify in facilitating connections and utilizing its music expertise for brand partnerships. It also positions the platform more as a social network, where creators strike deals with brands to sustain themselves.
Spotify’s launch of AUX follows its updated payment model from last year, which promised to bring an additional $1 billion to artists. While this was seen as a positive step, critics argued that it did not benefit emerging artists and, in fact, reduced payments to those who were already earning less to bolster payments to high-earning artists.
With the launch of AUX, Spotify is offering these artists, who have been excluded from the new streaming royalties model, an alternative way to make money through brand partnerships.
“Spotify AUX will broaden the opportunities available to artists, offering them a platform for creative expression, financial support, and strategic partnerships that go beyond traditional industry avenues,” Spotify explained in a blog post.
Joshua Burke, Global Head of Music & Culture Marketing at The Coca-Cola Company, shared in a statement, “We are proud to be an early partner to AUX, which integrates Spotify’s expertise to enable authentic connections with music fans worldwide. This is a natural progression of our long-standing partnership with Spotify and marks a key milestone for our commitment to artists and the music community. We are excited to launch Coke Studio at Spotify LA, which will provide recording support for emerging artists and a platform to promote their music.”
However, while Spotify promotes AUX as another opportunity for artists to sustain themselves through their art, many artists would prefer to be paid better for their streams rather than having to rely on brand deals like social media creators and influencers.
The Power of Music
But, with an overwhelming number of tracks being uploaded daily to streaming services and over 100 million tracks already available on Spotify, it has become challenging for new and emerging artists to stand out, grow their audience, and get paid for their work. And to make matters worse, advancements in AI technology could lead to a surge of AI-generated music in the future.
In fact, Spotify’s new royalties model, which has a minimum threshold for streams of songs, only adds to the difficulty, forcing artists to consider brand deals as a means of increasing their income.
“Spotify is always looking for ways to leverage our music ecosystem to deepen the connections between artists, brands, and fans,” said Jeremy Erlich, VP, Head of Music Content at Spotify. “AUX is a natural step for us to help brands strengthen their music strategy and better connect with new audiences through our expert insights and observations from our music team, tailored to meet brands’ needs.”
