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Starbucks - Your Next Music Superstore?
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.'"
That's 0.00000001% of the Seattle locations.
Sigs cause cancer.
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.'"
:-P
Wonder how they came to that conclusion.
I also wonder why the music industry hasn't.
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I look forward to buying a Venti cd.
no... he must be talking about boeing :)
I've always said that instead of selling tangible product, the music industry needs to shift to a content/service model. All they need to do is put up kiosks where you can insert a CD blank and your credit card, pick from an on-screen catalog, and have the kiosk burn you a copy (and maybe print you the liner notes, and spit out a jewel case, for a couple bucks more).
Of course, I imagine that the music industry would want your copy of the content to be encrypted or otherwise digitally crippled so that you couldn't do what you wanted with it. The real advancement in intellectual property law and consumer rights will come when they offer to let you buy a "no strings attached" license for the content for a buck or two more, which permits you to copy/transform the content as many times/ways as you want, as long as it's for your own non-profit personal use.
Moderator hint: a comment is neither "Flamebait" nor "Troll" if it is true.
'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.'
What Starbucks are they looking at? The few times I've been in a Starbucks, it's been full of dumb teenagers humming Brittney Spears songs. It's not like the stuff they're promoting isn't mainstream anyway. It's just a different branch of mainstream.
Show me a Starbucks where they play Mineral, Freakwater, or Belle and Sebastian, and I'll be impressed.
(On a slightly related note: one of the funniest things I have ever seen was at a Starbucks in St. Louis, MO, where I went to college. A bunch of punk kids (15-18 years old, I'd guess), with their anarchy patches and bright colored mohawks, were sitting outside the local Starbucks, happily sipping their corporate-whore coffee. I laughed my ass off. Ah, the irony.)
You don't have to be the person you've become.
There was something like this back in the day. It was a jukebox type deal, you'd pick your songs and it would make a tape for your, label and all. Maybe it made CD's too. I don't remember.
This has the potential to become another non-conventional music outlet like iTMS, but only if they do it right.
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.
I hate Starbucks but Schultz and MacKinnon are 100% correct. Here in Baton Rouge we have several shops that purchase, blend and roast their own coffee. Their coffee kicks Starbuck and typically cost less but good music is very attractive. I hate record stores more by a longshot than I hate the home of a second rate $4.00 cup of coffee. A set up like this could make me love them.
Now, if only they have the guts and brains to get away from RIAA label music, they would be my heros.
I also wonder why the music industry hasn't.
Maybe they have. However, maybe they've also determined that those individuals are already vehemently opposed to "corporately distributed" music, and are thus unlikely to purchase their products.
Such widely propagated beliefs, after all, die hard: According to many, network news is still liberal, American corporations are still honest, and only democrats violate civil liberties. To some, large, corporate music distributors will always be nefarious. And they're already capable of legislating their business model, so why bother?
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Anyone with a computer and broadband can do this at home, already. What will be so special about Starbucks that I would want to burn CDs there instead of in my living room? I suppose if the Kiosks are cheap enough to run they can still be profitable with a small percentage of that market. But I don't see them being a music superstore.
Michael
NO, it's a simple business model. It's really sort of a ... not a pyramid, more of a triangle, not so much a scheme... but a plan
Yes, it's a triangle plan. See, all you have to do is open two starbucks, adn get all your employees to open two starbucks. I'll show you some sexy graphs with you holding a lot of money. EVERYONE WINS AND WE ALL RETIRE BY 25
The Neo-Bohemian Techno-Socialist
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.
Doing my level best to piss off the religious right wing...
Or will the songs be burned from an archive of music that has been lossly compressed (more lossy than a standard CD)? Similar to when you burn downloaded songs from an online service?
Let these be actual CD quality songs, burned to actual CDs that are playable in any standards-compliant CD player, without DRM or artificial errors or any other insane copy-protection scheme, and I will become a frequent customer. But somehow I don't think the MPAA would allow that. Knowing them, the songs must be crippled in some way, by reduced quality or encryption or both.
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There is inferior bacteria on the interior of your posterior.
You can't even trust Charbucks to not burn their coffee, and that's what they are supposed to be good at. No WAY would they be able to handle a music store.
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who don't have their own MP3 player and/or laptop will probably appreciate this.
Some mornings it's hardly worth chewing through the restraints to get out of bed.
There are a lot of cafes that are very hip, without the poseur stereotype associated with Starbucks. Many already offer free wireless and/or computer access.
If this model was easy to implement, a lot of them would probably go for it. Maybe an enterprising slashdotter will take this on?
Information: "I want to be anthropomorphized"
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.
I tend to agree with them. This affluent 25- to 50-year-old (32, actually), pretty much only listens to NPR, but they're missing one important fact in their equation...
They're assuming I either already, or probably will, visit StarBucks.
(I've only been to Starbucks twice in my life, and the second time was to give them a 2nd chance. Needless to say: their coffee sucks, costs way too much, and I can brew a better tasting pot for myself right at home.)
Yes, I'm ignored by the Music Industry, but I've found the iTunes Music Store, and AllOfMP3 to be viable, and more preferable, alternatives.
Personally, I'd go to a coffee shop to drink coffee, and to a music store to burn/buy music. Yes, maybe listen to music, but not buy music. Besides, you already queue up for your coffee - now you want to queue up for your music as well while your coffee goes cold?
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I can not put one in my iPod. And if I don't lose or scratch it on the way home, I get to manually enter each track title.
They should offer a) 128Kbps CBR MP3 downloads over their wireless connection and b) business card-sized mini-CDs with a copy of the above. Sure both record companies and audiophiles will riot, but that's what 99% of customers want and use. Whoever wants to make money selling music better take notice.
Reasonable prices? A $4.00 cup of coffee is reasonable? LMAO
Don't get me wrong, I often stop by for a Vite Mocha. And sometimes feel like a sucker, But hey I like the stuff!
Scott
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What are you TALKING about?? SBUX has EPS of 80+ cents and growing, and its cash flows from operations dwarfs its (still extremely positive) net income; it's been sinking cash from operations INTO expansion, not somehow relying on expansion to fuel cash flow, which really doesn't make ANY sense at all. Jesus christ, you're insane.
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I think Starbucks can increase their revenue by following Monkey Island 4's lead. They should open a Starbuccaneer's which caters to today's modern pirates (y'arr). They could offer free p2p services inside which will allow mighty pirates to steal games, movies, and music!
Screenshots of the Starbuccaneer's concepts available here and here.
I'm sure Starbucks can buy the licence to use Starbuccaneer's pretty easily.
"There is no spoon." - The Matrix
Up here in the land of Tim Horton's, Ron James (a stand-up comic) jokes that he "likes to go to a Starbucks once in a while to see what the world would be like if the Nazis had won the war."
Might this music distribution idea further their aims??
Hail Mermaid!
Me? Debunk an American myth? And take my life in my hands?
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...
gameDB
Oh, here I thought you were going to call it "not innovative" because we've seen it before...
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Most Barnes and Noble bookstore/dvd/music store mish-mash have a "B&N Cafe" - everything looks like "Starbucks" - but no logos anywhere. The truth is, they are Starbucks, they use Starbucks coffee, etc - they just don't show the brand name anywhere...
I tend to wonder if they are the "generic" form of Starbucks (same as how some store brands are actually name-brand products produced for the store, and sold for less than the name-brand, but otherwise identical)...
Reason is the Path to God - Anon
In 1995 Money magazine published an article claiming it was high time to ditch Starbucks' stock, since the market was obviously saturated and they couldn't sustain their growth. I believe starbucks was about half its current size at the time.
I recently stopped by Hear Music and saw all this stuff in person.
The listening kiosks are HP Tablet PCs running (presumably) Windows XP. They are placed throughout the store and default to a selection of albums pulled from that section, i.e. in the blues section you get a handful of blues albums to preview. In the jazz section it's a handful of jazz albums, etc. Just as you would expect.
However, at any listening station you can scan the barcode on just about any CD in the store, and get a playlist of the complete contents of that album. The delay is noticeably longer than waiting for a CD changer, but obviously you have *way* more material to choose from. (Changing from song to song within a given album seems slower than hitting "next" on a CD player, which is a bit annoying, but surely they can fix that.)
There's a sit-down counter where you can build your mix. I was in a hurry and didn't ask the obvious questions, e.g. how much for a custom mix disc, do you get uncompressed or lossy compressed, is there any copy protection. I did notice two Rimage CD sitting in plain view behind the counter.
I've always liked the "smallness" of Hear Music compared to a behemoth like Tower Records. The feel is more like Newbury Comics in Boston (or how they used to be, anyways). The use of technology is a little raw and immature, but in general it seems to work without ruining the small store feel. Just my opinion, of course.
The store is nice, listening stations are okay, selection is very limited, a lot of people I had never heard of along with a small selection of more popular groups. The interface that they use to allow you to select your songs for your CD that you'll end up burning is a touch screen with a push button stylus. This is really clunky and very hard to make your selections. The one I was trying to use was wonky and very hard to select things on the touch screen. I had to click several times to get it to make the choice, some times it queued up a bunch of clicks and well, it was just too frustrating to finish the CD selections and I gave up. I'll take ITunes or something online any day.
...if they're not the ones doing it. Note that it's isn't Starbucks recruiting talent, working out technical glitches, and otherwise managing the distribution of music. They're managing the space in Starbucks' stores to make it more attractive to Starbucks' customers -- which is exactly their core competency.
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....
Let's try not to let fact interfere with our speculation here, OK?