Starbucks Gets Into Downloadable Music Biz

Mar 11, 2004

By George Anderson

Starbucks’ chairman Howard Schultz told Business Week, “This is not a test. We’re going for it.”

Mr. Schultz was talking about the coffee shop chain’s decision to offer a downloadable music service in 2,500 U.S. locations over the next two years.

The new service will give customers the ability to listen to any of 250,000 songs on a computer and have those they have chosen burned onto a CD to bring home. Starbucks will
charge $6.99 for a minimum purchase of five songs with albums costing $12.95.

“We have a unique opportunity to leverage the trust people have in the (Starbucks) brand,” Mr. Schultz said.

Hal Gaba, co-owner of Concord Records said, “There is no question in our minds that this is the future of music distribution. It’s a significant enhancement of the iTunes experience.’

Moderator’s Comment: Does Starbucks entry into the downloadable music arena represent
the future of music distribution?

Starbucks sells the experience. That will only become richer (and so too will Starbucks BTW) as a result of offering this service.

For those who have purchased Starbucks’ music collections in the past, we among them, going to a shop to hang out, drink coffee, listen to and download
music is an experience we know we’ll enjoy. We just hope the service works with Macs and not just PCs.
Anderson – Moderator

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