Starbucks Coffee introduced its Hear Music Media Bar concept in 45 Seattle and Austin pilot locations with much ballyhoo and media attention last year. I questioned the move with some HMOs (hot marketing opinions) here and here on Brand Autopsy.
Well … nearly 8 months have passed since Starbucks launched the Hear Music Media Bars and according to a BusinessWeek article [sorry, sub. req'd], the venture has been disappointing.
Hear Music insiders say the response at the stores in Austin -- a college and live-music town -- has been disappointing. Even in Starbucks' home city of Seattle, few customers were listening to the music during recent visits to four stores with media bars. During several hours at each of the four spots, only one CD was burned.The Austin experiment could be a sign that Starbucks is misreading its customers. The city is full of tech-savvy music downloaders who carry iPods, not portable CD players. Digital music these days means MP3 file mixing and sharing, and that's not in the business model yet, says digital music analyst Josh Bernoff of Forrester Research Inc. "Starbucks is not going to be a significant contributor to the music economy."
Living in Austin, I’ve yet to see someone actually buy a customized CD. However, I have seen lots of students using the Media Bar as a personal jukebox instead by listening to tunes over headphones while studying/reading in one of them comfy chairs Starbucks has.
Plans were to have up to 1,000 Hear Music Media Bars in Starbucks locations by the close of 2005 ... I reckon those plans have been scaled back and are being retooled.
While the Hear Music Media Bars are struggling, the Hear Music record label is succeeding. Starbucks sold oodles and oodles of Ray Charles’ GENIUS LOVES COMPANY album and now they have caused Antigone Rising’s debut album, FROM THE GROUND UP, to climb the charts.
Regardless of how it turns out, I say kudos to Starbucks for tinkering with their phenomenally successful formula.
It's quite a stretch for a CEO to envision a coffee company as a music company. But Starbucks is making the leap, with quicker success in some areas than in others.
Posted by: Matt | June 14, 2005 at 08:21 AM
The reason that Starbucks sold so many of the Ray Charles CD is that it's a good CD. Yes, Starbucks has great distribution, but "it's the music, stupid" that sells. I've heard the Antigone Rising CD and seen the video on VH1, it's pretty good. I would buy it at Starbucks because I like the CD.
I would be remiss if I didn't comment on the CD burning, file sharing state of the music industry. Coldplay's latest CD was released last week. You have to believe that their audience is in the upper demographic, sophisticated enough (if you include the college audience) to have access to have file sharing services. Yet, with those threats, Coldplay's X & Y sold 740,000 copies last week, with almost 10% of those sales downloaded from online music stores — more than double the prior record for first-week downloads. The same reason that movie ticket sales have been down for months...the movies suck. It's not other mediums that are taking the audiences away. How many times have you asked friends or family to go see a movie, yet there is nothing worthwhile playing?
Thank you all for keeping B.A. a great blog and must read.
Posted by: Ron Curry | June 16, 2005 at 10:05 AM
Ron, thanks for the kind words about Brand Autopsy.
Now, I didn't think the Charles cd was good. No disrespect to the man, but his voice showed really his age.
I doubt Starbucks will be able to repeat the Charles CD sales success with the announced Herbie Hancock Hear Music release. We gotta remember the perfect storm of marketing synergy occurred to help drive sales of the Charles cd --the release of the movie Ray and his untimely death.
Posted by: johnmoore (from brandautopsy) | June 16, 2005 at 05:23 PM