While some traditional record retailers continue to shutter stores, Starbucks is unveiling two new Hear Music Coffeehouses. The stores integrate a coffee shop with a traditional record store and digit

While some traditional record retailers continue to shutter stores, Starbucks is unveiling two new Hear Music Coffeehouses. The stores integrate a coffee shop with a traditional record store and digital download outlet.

The new outlets, located in San Antonio, Texas and Miami, expand on the prototype Coffeehouse which opened in March 2004 in Santa Monica, Calif.

Starbucks Entertainment president Ken Lombard says that research conducted at the Santa Monica store showed that customers wanted a deeper digital catalog for creating their own CDs and fewer pre-existing physical goods. Therefore the San Antonio and Miami locations will offer 1 million tracks for download, up from 250,000 at the Santa Monica store; and 5,000 physical titles, down from 10,000 in Santa Monica. Burned CDs cost $8.99 for seven tracks, and 99 cents for each subsequent track. Tracks are not available for loading onto portable players.

The San Antonio store, located on the touristy Riverwalk, opens Dec. 19, while the Miami location, in tony South Beach, will open in early 2006.

Starbucks chairman Howard Schultz says plans for more Coffeehouses are underway, adding that Starbucks is “in the embryonic stages” of its music growth. He declined to give details on future sites for stores, but added that music is a profitable business for the company.

“We believe there is the ability to create the physical analog to what Apple and iTunes have done on the web, to have a substantial library of digital music that could be physically digitized and burned in a retail environment. Santa Monica was the testing ground and it exceeded all our expectations.” He adds that he does expect stores to continue to carry physical titles. “This is not one versus the other,” he says.

Given that the new stores are in cities with strong Hispanic populations, Lombard says, “it is critical to the success of the stores that we connect with the customers, so we will focus attention on the Latin component.”
Additionally, Starbucks has selected the second act for its “Hear Music Debut” CD series, a program designed to help break new artists.

Sonya Kitchell, a 16-year-old singer/songwriter from Massachusetts, will release “Words Came Back to Me,” April 4 through Velour Music Group/Starbucks Hear Music.
Unlike last April’s first offering in the series—a live album from Antigone Rising—Kitchell’s album will be available to all retailers simultaneously. Starbucks will provide marketing support and, as it does with all projects it funds, it will receive a portion of sales from outside outlets. The Starbucks/Kitchell deal extends for three albums.

Lombard says the decision to take a title exclusively is made on an individual basis. “It was obvious to us that wider distribution was most appropriate,” he says.
Kitchell tells Billboard, “I want everyone to be able to hear my music — whether they are in a record store or a Starbucks.”

Antigone Rising’s “From the Ground Up” sold 94,261 copies during its exclusive four-month window at Starbucks. Since its April release, it has sold 122,763 copies overall.