After only a year Starbuck's Hear Music record label will be handing over the label's management duties to Concord Music Group. Since forming in March 2007 Starbucks has signed and released albums from former Beatle Paul McCartney, Joni Mitchell.
"Now is the appropriate time to restructure our entertainment business to better align our efforts with our overall business strategies," Howard Schultz, chairman, president and CEO, of Starbucks said in a statement.
Senior VP of Entertainment at Hear Music, Ken Lombard has exited the company. Starbucks will instead focus on "digital strategy and "core" content with music and books digitally", despite eight Grammys and three #1 New York Times bestsellers, according to the Washington Post,. Managing a music label is not considered "core".
"Starbucks will look for ways to enhance the customer experience through the use of wi-fi and other in-store technology," a press release stated. Free wi-fi is the way to go.
My Trusted MOGs
Has Starbucks ever reported how many CD's they sell in their coffee shops? I've heard stories of people doing it (usually with an admission of shame), but I've never seen anybody buy a disc there.
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[While sipping a Starbucks Grande Coffee] I bought a Pink Martini CD there as a gift for my wife once. I always wonder how many of the CDs they have in there get ripped off.
I am not surprised they are getting out of the record business. Have they had a big hit? The McCarntey record, for all the hype, wasn't very good. I love him, but let's face it he's done. The last record he put out that I wore out was "Back to Egg" with Wings (still love it). Antigone Rising, another one of their artists, is not exactly breaking new musical ground.
I noticed today they have a big display for "Hillary". Sometimes I like the free itunes downloads they offer.
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I think that big ol' Moon-Penny is probably doing the right thing. They were founded on being a coffee company, but over the years have been trying the Micro-Squish approach to business. Not very becoming. I hope they can get things back on track. Being one of those that has lived all their lives in that little land o'java, you do tend to root for the home teams.
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As a former badass that swiped CDs during my time as a record shop clerk, the first thing I asked the baristas when Starbucks started selling CDs was, "um...there are no security tags on these suckers...do a lot get stolen cuz my fingers are starting to twitch like in my old school CD klepto days?" they always stare me down now when i go in to grab a cup of joe, but the answer i got was that for every ONE purchased album at starbucks it makes up for SIX stolen ones...which i still don't understand how that works out... and didn't help convince me that stealing a CD from starbucks was nec. a bad idea, although I swear on anyone's grave i never did it...
they want to focus digitally now, which means they will be selling more of those credit card CDs at the counter? the ones that you pay $14 bucks for at the store and then redeem via itunes, which is pretty pointless considering you can just purchase the CD on itunes.
it's like Starbucks tried to be this innovative music avenue and it just didn't work out b/c nothing will ever defeat iTunes...ever.
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"Now is the appropriate time to restructure our entertainment business to better align our efforts with our overall business strategies," --Howard Schultz, chairman, president and CEO
Translation: SHIT!! ( they pulled the classic superpower strategy, they spread themselves too thin. There's over 350 locations in NYC and it's 5 boroughs, 290 in Manhattan alone. Throw in higher fuel prices, a few years of bad crops and the fact that Dunkin Donuts makes a much better/cheaper cup of coffee. As for their entertainment business they seem to be marketing for the hippy-dippy 60 year old and those who wish they were. A balloon can only blow up so far before it POPS.
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I still miss the loss of one of Hear's two (!) retail outlets on Berkeley's upscale 4th Street. I was a regular customer; the space was taken over by Down Home. I did on occasion buy a CD at a Starbuck outlet; one of my favorites is a soulful comp. called "Something's Got a Hold on Me" with some great tracks, some familiar, some obscure. Starbucks itself is having a difficult time, stock is down and it is by no means clear that Schultz will be able to turn things around. Hear itself was started by music heads and a first class operation. BerkeleyBob
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It's kind of unclear what "turning over the managment of" really amounts to. So I'll wait and see. (Right. Like I've been in a Starbucks in the last 6 months....)
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Dach, I don't purposely avoid Starbucks, but have you seen how much an espresso costs at Dunkin Donuts? They aren't that much cheaper. For regular coffee I never get Starbucks, rarely get the Dunkin either..Home brewed or the ultra-cheap NYC cart brown water for me.