what is the point of Spotify sponsoring Barça

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Barça will end its sponsorship agreement with Rakuten at the end of the season, a relationship that began in 2017 and is coming to an end. starting next season Spotify will be the one to take its witnessafter weeks of rumors culminating in a visit from its leadership leadership to the Camp Nou on match day just before the official announcement and the official announcement a few hours ago.

An announcement that may surprise, especially considering the figures of the operation. Spotify will pay, according to some leaks (details will be made public on April 3) 280 million in four years in exchange for sponsoring the shirt of the men’s and women’s teams, their training clothes (only for three years) and the name of the stadium, the latter, an unprecedented decision at Barça, in a “strategic” and “long-term” relationship depending on the club. That is, it can go beyond the three-year term. But there are many ways to see it.

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Some quick finances. Spotify invoiced almost 2,700 million euros during the last quarter of 2021. With less than 10.5% of what they billed in that quarter, they have enough to pay for three years of sponsorship. Finances are always more complicated, the company spends almost all its money to pay royalties and not even every quarter ends in the black, but they do have the recurring revenue and cash flow to put into perspective what will be their biggest marketing campaign spread over three years.

A global service in the shirt of a global club

There are several reasons why Spotify’s deal makes sense. On the one hand, Barça, like Real Madrid, Manchester United or others, is a global club, with fans in every corner of the world. That includes markets where Spotify does not have as much presence but has room to achieve it in the coming years.

Picking one of those clubs with a global reach makes sense. think global key, not local. A perfect example is that of Manchester United itself, which was chosen by Chevrolet to print its advertising on its shirt in 2014. A year later, Chevrolet ended its presence in Europe, including the United Kingdom. However, United’s sponsorship was extended until 2021. And that United, like Barça, is not at its best. He has not won the Premier League since 2013 or the Champions League since 2008. In recent years he has also frequented the Europa League more than the Champions League. However, the weight of its brand worldwide compensates.

Something like that happens with the sponsorship of Spotify in Barça: it is not limited to its impact in Spain, and to a lesser extent, in the European Union. The impact is global and also enters a bet on the future (Barça has been plagued by young talents in recent years at the same time that it has let out, for one reason or another, stars in their thirties, such as Messi, Suárez or Iniesta) although the current moment is not optimal.

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There is more: Spotify closed 2021 with 406 million users worldwide. 180 paid, 226 free plan supported by ads. Besides that those 406 million still have room for growth. Other free advertising-based products have many more users, such as Facebook, which is close to 3,000 millionor Instagram, which just exceeded 2,000 million. A global impact sponsorship is one more leverage to propel yourself to much higher numbers.

Even if it only gets a big boost in markets where free plan users prevail, it would be getting an interesting deal. long-term. Free users of Spotify are 55% of the total, but they do not even achieve 15% of the income. Spotify wants to change that trend and shoot the weight of free users up to 30% or 40% by the end of the decade. His commitment to podcasting, which makes it possible to infer the tastes of each user much better, has a lot to do with that strategy.

In the background, a hostile competitive landscape:

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There is also a common term in marketing, awareness, which refers to the ability to be recognized by the consumer. It is usually important in the initial phases of a product, when its brand is not yet popular, as was the case with Finetwork sponsoring the Spanish men’s and women’s soccer teams, as well as other clubs such as Betis and Real Sociedad. Or Digi, another teleco with its logo on the Rayo Vallecano and Espanyol jackets. The shirts of clubs like Barça or Real Madrid have this same purpose, but on a global level.

This mixture of increased reputation due to the fact of being linked to one of the greats of world football together with the margin of growth in a global market makes this operation, however grandiloquent it sounds, take on a certain logic. Only time will tell if it pays off or not.

Barça will end its sponsorship agreement with Rakuten at the end of the season, a relationship that began in 2017…

Barça will end its sponsorship agreement with Rakuten at the end of the season, a relationship that began in 2017…

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