Thursday, July 7, 2005

Exclusively at Starbucks

  Okay, I hate to be the one to break it to you, but the record industry is struggling.  For a variety of reasons, it’s becoming more and more difficult to sell full-length CD’s.  There’s the legal and illegal downloading of singles and a reluctance in consumers to buy entire albums.  There’s technology that allows the copying of CD’s, but no technology that effectively prevents it.  There’s the ever-growing iPod craze.  And there are compilation CD’s, like “NOW That’s What I Call Music,” that toss all of the year’s hits onto one CD.

  In essence, album sales are slumping because avenues of acquiring music are broadening.  Online sales are soaring, but there is also a mortar-and-brick outlet that has stumbled upon a novel marketing campaign—one that could change the way you are exposed to new music.  That’s right—Starbucks.

  There is no brand, no corporation, that is more lifestyle-oriented than Starbucks.  Starbucks is at once an indicator of status, income, relaxation, and taste.  To the Starbucks consumer, the name evokes a quality of life, of discerning taste, of environmental issues.  It’s more than a fixture in their daily routines, it’s an addiction.  It is the perfectly branded enterprise. 

  On the other hand, it is also stigmatized.  Critics might think of Starbucks as snobby, elitist, and overpriced.  To outsiders, it’s a true icon of Corporate America that panders to middle-class yuppies.  But inherent in that ideology is the admission that Starbucks reaches that demographic in a way that few, if any, retailers can.

  The Starbucks experience is, in many ways, as much about the atmosphere as it is the coffee.  In a complicated and multifaceted marketing campaign called Starbucks Hear Music, they have begun peddling the music they play—music that defines the Starbucks lifestyle.  This means that they have to be incredibly selective.  Stocking an album is an endorsement, and in this approach they have become the editorial voice for their consumers.  They expose the consumer to new music, and often provide the exclusive opportunity to purchase it.

  And they have met with great success.  They carried Ray Charles’ “Genius Loves Company,” and sold nearly 600,000 of the 3 million sold worldwide.  They have the exclusive rights to Alanis Morissette’s acoustic re-release of “Jagged Little Pill,” which sold 60,000 copies in its first week.  It hit Starbucks locations June 13, but an exclusive six week window was negotiated, and won’t be distributed to other national retailers until July 25. 

  Starbucks’ selectiveness has become newsworthy.  Their choice to stock a title grabs headlines.  Their decision not to grabs more.  They recently decided against carrying Bruce Springsteen’s “Devils And Dust,” in part because of explicit lyrics in the song “Reno,” which describes an experience with a prostitute.  Yet Wal-Mart, the last bastion of morality, carried the album (and boasted the exclusive rights to the DualDisc version).

  In addition to selling CD’s, Starbucks also has it’s own channel on XM satellite radio, which it uses to expose consumers to their product.  They are single-handedly breaking the all-girl group Antigone Rising.  And Hear Music media bars are beginning to spring up, where you can burn your own custom CD’s while sipping Frappuccinos.

  To find out other ways Starbucks is revolutionizing the music industry, log on to   

-From Pulse
   July 7, 2005