Starbucks - Your Next Music Superstore? 226
prostoalex writes "The Fast Company magazine looks into the next horizon in music retailing - allowing customers to choose the songs they like in relaxed environment and burning custom CDs from digital copies of the content. The claimed innovator in the field is none other than Seattle-based Starbucks: 'This August, Starbucks will install individual music-listening stations, with CD-burning capabilities, in 10 existing Starbucks locations in Seattle. From there, the concept rolls out to Texas in the fall, including Starbucks stores in the music mecca of Austin. With the help of technology partner Hewlett-Packard, Starbucks plans to have 100 coffee shops across the country enabled with Hear Music CD-burning stations by next Christmas, and more than 1,000 locations up and running by the end of 2005.' And what's wrong with traditional music outlets? 'Schultz and MacKinnon came to believe that the core Starbucks customer, an affluent 25- to 50-year-old who's likelier to be tuned in to NPR than to MTV or one of the nine gazillion radio stations owned by Clear Channel Communications Inc., probably feels ignored by the music industry.'"
Sit down and enjoy the coffee (Score:5, Insightful)
Music Industry (Score:5, Insightful)
Wonder how they came to that conclusion.
I also wonder why the music industry hasn't.
I smell desperation... (Score:1, Insightful)
They'll learn the lesson that no one seems capable of learning from history: you can't rely on expansion to keep up your cash flow forever.
Just ask that other famous Seattle company about how that's working out for 'em.
Well, good luck there, Starbucks. Nice having known you. Good luck with that "branching out" thing.
Starbucks (Score:1, Insightful)
Selection, Quality, Price will make or break this (Score:5, Insightful)
The "NPR-not-MTV listener" they are catering to will have widely varying music tastes, not just the Top 40. How much of a selection will each Starbucks provide? Do they plan to have T1 linkups to a central server? If they work with local storage, then the source tracks will probably be already compressed tracks, affecting quality. I don't see each Starbucks having a half-terabyte RAID array to hold losslessly compressed originals.
Secondly, price. This can be a one-stop-music-shop, catering not just to those who see it and burn/buy a CD on a whim. Since it doesn't offer any of the advantages of iTMS-style music downloads (instant transfer to computers, portables, etc.), they better price it at less than $0.99 a track. A fixed-price option, e.g. 1 80-minute CD for $12-$15 might be very popular.
It's upto Starbucks to use its enormous geographical clout to negotiate a sweetheart deal with the recording industry, and make it as attractive to the customer as possible. Otherwise, with audio-CD only Discmans going the way of the dodo, and the growing popularity of iTMS-like solutions, this scheme will turn out at best to be a novelty.
Re:Music Industry (Score:3, Insightful)
Re:Core Starbucks Customer?? (Score:5, Insightful)
Anecdotes != data. I'm sure Starbucks has spent millions determining their demographics.
Starbucks - the Wal-Mart of Coffee Shops... (Score:5, Insightful)
Once upon a time, coffee shops sold coffee, tea, hot cocoa, and other drinkables. A few added various sweet pastries, like croissants, but that was about it. Then along comes the post-expansion Sign O' the Mermaid (it was once a little independent coffee shop, too).
Suddenly, to keep up with the Seattle Menace, coffee shops must now sell all of the above as well as sandwiches, soup, coffee mugs, branded coffee makers, candy, books, gift cards... you get the idea. A small coffee shop that just wants to focus on the core product -- namely, coffee -- has to work hard to establish a niche in the neighborhood or close its doors. Most of them don't want to be multi-specialty retailers, and they shouldn't have to be.
Starbucks now sells so many things that coffee is almost an afterthought. Think that won't affect the quality of the product? Do a taste-test with Starbucks versus one of the other chains out there. (Personal favorite: Diedrich's.) Even the lightest of Starbucks' roasts (most are pretty dark) comes off tasting acidic and rather burnt.
So yeah: make room, if you want, alongside the logo-emblazoned travel mugs and Starbucks brand press-pots for "Mermaid Music Vols. 1" through infinity. I'll walk up the street to my local indie coffee shop and get cuppa joe that doesn't taste like muddy battery acid.
Not a chance (Score:4, Insightful)
Re:I smell desperation... (Score:1, Insightful)
maybe RealNetworks?
OR Washington Mutual?
OR Safeco?
OR Nordstrom?
OR amazon.com?
OR maybe you mean former Seattle based Boeing?
And what makes you think they can't compete with music stores? They will have a substaintial savings on shipping, and can likely provide the music CDs at a lower price (packaging costs), they already have the locations, so its not an additional cost in that regard...so where is the doubt coming from? Seems to me they can compete with traditional music stores just fine.
Re:Core Starbucks Customer?? (Score:3, Insightful)
Isn't that an oxymoron? How can there be more than one "main" branch?
Show me a Starbucks where they play Mineral, Freakwater, or Belle and Sebastian
Ah, yes. Everybody thinks their own favorite bands are edgy, eclectic well-kept secrets, and everything else is corporate mass media pablum. News flash: "underground cachet" is just another marketing technique.
Suprisingly Interesting (Score:5, Insightful)
I RTFA expecting to come out of it thinking "gee, brand dilution like this usually means the beginning of the end for companies." Instead, I was surprised to end up thinking what a neat idea this could be, if implemented correctly.
I think I'm probably preaching to the choir here when I say that there are lots of songs out there that I like but so very few full albums that I want to own. Thus, the joy that is P2P and iTMS; combined with a cd burner, all the music I listen to in my car these days is mixed the way I want it to be, and in ways you'll never find on a commercial mix (try finding a CD with Nightwish, E Nomine, and L'Arc en~Ciel on it ^_^). So the idea of a mix cd with actual labelling and even liner notes is naturally fairly appealing. Simply put, it passes the "I'd give it a try" test.
Three major questions that aren't answered in the article, though, which would be major deciding factors for me:
Nevertheless, I think this is a fairly neat idea; the current distribution models for music have left a lot of great stuff behind, so going back to a system where people can get recommendations and such is pretty cool. And the inclusion of the Audiogalaxy-esque "you might also like . . ." feature is just awesome; that was my favorite part of AG, and it's something I sorely miss.
Not quite... (Score:1, Insightful)
Basically Starbucks is well suited to selling anything that doesn't take much physical space. Why go to tower records, when you can just go grab a mocha and burn exactly what you want? Why go to Blockbuster, when you can burn the movie you want at Starbucks? Why go to Best Buy to get the latest software when you can get it at Starbucks?
Of course the obvious question is why don't you just get all that stuff off of Itunes, etc. Starbucks is targeting the market that is really most likely to be in the know about Itunes, etc. So I do wonder if their opportunity here is fleeting.
The same thing might be said about their wifi hotspots. Good theory, but with more places offering it for free, and 3g slowly working its way into the world, it's really not as valuable. The advantage they have is that they are ubiquitous and a lot of people are going to go there for coffee anyhow. But if I can go someplace that has good coffee and free wifi why would I pay at Starbucks?
Re:I smell desperation... (Score:5, Insightful)
Re:Core Starbucks Customer?? (Score:1, Insightful)
Even at 10 cents/minute; it's cheaper for airtime on my cell phone.
I am a big fan of the fancier coffee drinks; I have a hard time limiting myself to 5/week. I also avoid starbucks like the plague because of their WiFi access plans. There are dozens of coffee shops and restuarants around here with free WiFi.
If starbucks charged a sane amount or included some free time with their drinks, I'd be in there a couple of times a day; as it is, even when I'm just grabbing a coffee on the way to work and I don't have time to sit there and drink it, I will go out of my way to avoid starbucks because of their WiFi pricing.
Re:Core Starbucks Customer?? (Score:5, Insightful)
How can there be more than one "main" branch?
Of course there are different branches of mainstream music. Pop, hip hop, country, punk, metal, etc. all have some artists who are mainstream, and some which are "edgy, eclectic well-kept secrets." If you just dislike my metaphor, I apologize. On reflection, it is a bit awkward.
What I'm trying to say is that considerng Ella Fitzgerald and Lauryn Hill outside the mainstream seems silly to me. No, they're not all over the Top 40, but they aren't really unknown either.
But, then, I worked in college radio, so perhaps my idea of "mainstream" is a bit skewed.
Resistance is futile... (Score:2, Insightful)
When I was in high school in the late '80s, I worked at the mall at Record Town, a brand that has been replaced now. Back then they were owned by Trans-World music, and were the penultimate example of the overpriced, middle American record store.
We had this gizmo for a while, before CDs fully supplanted cassettes, and before burnable CDs were de rigeur (I believe Philips was holding the patent, and the record industry cartel was trying to block them from releasing it...sound familiar?). Anyway, it basically was a touch screen CD jukebox that'd let you peruse a rather large catalog (for its time) of music and select a number of songe which were automatically recorded to cassette for you. Since I worked there, I got a few of these tapes, and it was a cool way to get some music that I didn't otherwise want to purchase.
Anyway, I am struck by how this is exactly the SAME THING all over again...just as CDs are about to be replaced by digital files, someone is going to try to cash in on the last bit of the CD money before it evaporates.
The real issue here is that the idiotic music industry is basically a 'singles machine', though they desperately want to be an 'album machine'. They have been fightint tooth and nail against models like this that move the "single" to the paramount of importance, even though the real truth is, we have always cared about singles, for the most part, rather than long droning albums. Most bands have one or two good songs in them anyway. I wish they'd just wake up and realize this...
Re:Core Starbucks Customer?? (Score:4, Insightful)
Anecdotes != data. I'm sure Starbucks has spent millions determining their demographics.
Indeed they did. From the Article:
Schultz and MacKinnon came to believe that the core Starbucks customer, an affluent 25- to 50-year-old who's likelier to be tuned in to NPR than to MTV
They determined that their customer is more likely to be a talk show radio listener than a music listener. And yet they plan to offer music, and not talk radio sessions, in their stores? I think they're letting their "vision" get in the way of their research.
As an NPR listener myself, I tune in precisely because it doesn't have any music, and I don't usually buy music. Why does Starbuck's think that they can sell me some?
It isn't outside their "core competency"... (Score:3, Insightful)
And, though anecdotes mean very little in this game, I can't count the number of times that I wish I could have burned a copy of the music playing in a cofeehouse around here. As long as it isn't outrageously expensive, I can see it being very popular....
Re:I smell desperation... (Score:1, Insightful)