Starbucks' Hear Music Coffeehouse experience, <A HREF="http://www.billboard.com/bb/biz/newsroom/digital/article_display.jsp?vnu_content_id=1000460172">tipped here</A> last week, opened for business to
Starbucks' Hear Music Coffeehouse experience, tipped here last week, opened for business today (March 16) at the company's flagship Santa Monica, Calif., location. Customers can sip coffee while creating customized CDs they can buy within minutes. The discs, which feature Hewlett-Packard tablet PC technology, cost from $6.95 for five songs to $12.95 for a full album.
Four major labels -- Universal, EMI, Sony and Warner Bros. -- are licensing music to Starbucks. Don MacKinnon, Starbucks' VP of music and entertainment, says the chain is aggressively courting indie labels and expects BMG to hop on board soon. About 20,000 songs are available at the Santa Monica store, but within the next several weeks, that number is expected to grow to 150,000.
Starbucks chairman Howard Schultz says the chain has 30 million weekly customers and already has a music culture, with background music playing and compilation discs for sale.
By the end of 2004, the company expects to roll out the technology to 200 of its U.S. stores. Starbucks is also looking to open two or three fully integrated CD/coffee retailers in the next 12-18 months. These stores would sell about 10,000 current and catalog CDs, in addition to offering customers the chance to make custom albums.
Interscope Geffen A&M chairman Jimmy Iovine tells Billboard.biz that despite the popularity of downloading at home, the Starbucks project will attract customers. "People have kitchens, but they still like to go to restaurants ... When families go on KaZaA and look for Britney or Norah, they might see 50% pornography, but Starbucks is a safe environment to find music."
Starbucks -- which bought independent retail chain HearMusic five years ago and has been pushing a branded compilation series called "Artist's Choice" -- also announced today that it will open two or three CD/coffee retailers in the next 12-18 months. The outlets will sell about 10,000 current and catalog albums, in addition to the custom-CD service.
"We immediately got it," adds Ted Cohen, senior VP of digital development and distribution at EMI, which licensed 45,000 songs to Starbucks. "My Starbucks on the corner is jammed with people. I want to be in front of those people."