Starbucks Hands Record Biz To Concord
by Paul Cashmere - April 25 2008


Starbucks has withdrawn from the music business and handed its record label Hear Music to the Concord Music Group.


Starbucks has withdrawn from the music business and handed its record label Hear Music to the Concord Music Group.

The coffee chain made an aggressive move into music when it launched the Hear Music label a year ago. Hear Music gave heritage artists who are no longer played on radio an alternative outlet to promote their releases.

The first artist to release on Hear Music was Paul McCartney with the 'Memory Almost Full' album.

Since then, James Taylor, Joni Mitchell and Carly Simon have followed suit and released on Hear Music.

Starbucks started into the music business when it released Ray Charles 'Genius Loves Company' album with Concord Records.

The company share-price has been on a downward slide for the past year. It has dropped from $32.30 a share a year ago to $15.39 this week.

Starbucks withdrew from the music business so that the company could concentrate on core business.

It was a stupid move to begin with. I can't imagine who thought that taking someone in the food and beverage service and turning them into a music distributor was a good idea. It's one thing to stock and sell a few CD titles. Gas stations and convenience stores do that all the time. You can sell a few things to people on impulse. It's another to assume that you can do something like this.

The old "concentrate on core business" is just a softer way of saying "we fucked up!" It's used all the time and typically means the same thing every time it's used.

Agreed.

Alright, sir, your kidney surgery is over. Hey, listen, while you were under, the anasthesiologists recorded and produced this Jimmy Buffet CD. Seing how you'll be recouperating in bed for the next few days, would you care to purchase a copy? It's not covered by your insurance, but it's only $14.99!

Actually, Walter, from what I read in the NY Times a few weeks back, Starbucks IS actually trying to get back to their core business--that being, coffee. I'm not a purveyor of Starbucks because I'm not paying five bucks for a cup of coffee, but supposedly they feel like they are losing their old customers because they were branching out in food items and such and want to get back to the way they originally were.

Good call on their part (IMHO.) I'm very much in favor of trying alternate distribution models for CDs (since the RIAA can't seem to get it right) and I'm glad that Starbucks gave it a try. After driving to several different shops to find the Simon and Garfunkel CD (several days after the release date) I wrote them off as a viable player in the CD distribution game. Maybe that was unfair of me, but they must agree since they are bailing out.

We're saying the same thing here. Their branching out in all directions and the inherent hubris obviously hasn't helped them any. Just because they did coffee well, didn't mean that everything else was going to work. They're starting to realize that they screwed up and the whole "concentrating on core business" is just a nice way of saying that.

Curious if they're going to give up their in house exclusive compilations which they've done for years, mostly with EMI/Blue Note & occasionally with Concord & XM.

Last night I was in a mall and on a whim decided to run into the Starbucks and see what CDs they had. The one lazy susan-type display of CDs was jammed into the front corner of the shop, with displays for other products so close on each side of it that you couldn't even turn it to see what was on the back. I could see that there were CDs on the other sides, but I wasn't going to move the other displays just to see them. I'm not a big coffee drinker, so I walked out empty-handed.

I guess this is just more evidence of the low level of importance these guys put on their music business.

The SB's here make them pretty easy to get to.