Starbucks Expanding Hear Music Concept

Media bars rolling out to Seattle, Austin stores.

Starbucks will push its Hear Music digital music offering into Seattle and Austin in the next month. The Hear Music media bar is an in-store kiosk that allows consumers to purchase customizable CDs on demand.

The new locations mark an expansion of Hear Music, which was unveiled in March at a Starbucks in Santa Monica, Calif., along with the new Hear Music Coffeehouse concept. Each Hear Music Coffeehouse stocks 15,000 current and catalog CDs in addition to the media bar’s digital music offerings.

Rollout of the media bar begins Oct. 18 in Seattle and Oct. 25 in Austin. The company expects a total of 45 stores in those markets to be equipped with kiosks by the middle of next month. Starbucks says it plans to move the Hear Music media bar into additional markets in mid-2005.

Starbucks is offering seven songs for $8.99. Additional songs cost 99 cents each.
The company has a catalog of 150,000 tracks and content deals with all four major labels and 40 independents. The media bar will also feature content exclusives, as well as Hear Music editorial features and recommendations.

Ken Lombard, president of Starbucks Entertainment, tells that the company sees the digital music initiative as an opportunity to reach underserved adult consumers who are not interested in top-40 music. “Our customers have really given us permission to play a significant role in how they discover and purchase their music,” he says. “This is a smart and strategic move for Starbucks. We’re going to enhance the Starbucks experience while developing a new business channel.”

No timetable has been set for further expansion of the Hear Music Coffeehouse concept.
Each media-bar-enabled store is expected to have three to six Hewlett-Packard tablet PCs -- the devices used for browsing and purchasing -- located in its seating area.

Expansion of the Hear Music service comes on the heels of Starbucks’ success in driving sales of the Ray Charles album “Genius Loves Company” through a partnership with Concord Records, and the launch of a Starbucks Hear Music Channel on XM Satellite Radio.

The company is also continuing with its branded-CD initiative. Starbucks bought independent retail chain Hear Music five years ago and has been pushing branded compilations in its stores under the Hear Music banner. Among these is the Artist’s Choice compilation CD series, which recently released an Emmylou Harris compilation; one from Norah Jones is due early next month.
The company also reaches an estimated 30 million customers weekly with in-store play initiatives.

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