Starbuck's music biz falling

[Billster]

Read all about it!

 

 

But critics in the music industry charge that the company squandered its early cachet by mismanaging the effort to broaden its music mix. The picks that reflect its early eclecticism are now squeezed in with offerings not unlike those at Wal-Mart, like the latest releases from Alicia Keys and James Blunt. There is also space for the familiar baby-boom artists that Starbucks has marketed through its own label, including Joni Mitchell. It is not a shift that has been lost on customers. The music offering "is more popular now," said Hazel Delgado, 33, a social worker and Starbucks regular from San Bernardino, California. "I want to come in and be surprised. If they do get more mainstream, why bother?"

 

 

That last quote goes into my (very thick) file of anecdotal evidence that people want new music, in new styles - they just need exposure. Think of all the wonderful music you come to know as a musician that remains under the radar of the mass of culture.

[blue2blue]

 

The coffee chain began its music offering with a 1994 album by the saxophonist Kenny G (an early investor who is now an artist on the company's own label), but it developed its highbrow reputation from more traditional jazz releases.

As the twig is bent...

 

 

My favorite coffee house has a barista-driven jukebox (actually online subscription service) and lets the (generally) young baristas pick it. Of course, they're not selling music -- only expensive coffee drinks and even more expensive pastries. The boss is always looking for sensible ways to expand -- she added an international news rack -- probably in the top two or three in a town of a half million people -- but I suspect there's no way in heck she'd go into the CD sales business.

 

For one thing, she's too in touch with her clientelle to think that the young customers buy anything so last century as a CD...

 

BTW... the baristas tend to pick a pretty eclectic mix (they are strongly discourage from playing aggressive rock or punk -- which doesn't stop the Ramones from sneaking on occasionally). But it's a real mix: a lot of classic jazz -- and NO Kenny G, which would probably start a small riot if it did get on -- a lot of post-rock type stuff from folks like Iron & Wine, Belle & Sebastian -- and a lot of 60s music (typically picked by someone born in the 80s), everything from the Nick Drake (which always seems to win new fans... too bad the guy couldn't get arrested during his short lifetime) to early Jefferson Airplane or Paul Butterfield. A while back they played the soundtrack from The Trip... that was pretty cool. It took me about half the album to finally identify it. (The jug band tune, "Psyche Soap" -- which sticks out of that soundtrack like a sore thumb -- was the giveaway, IIRC.)

 

 

Anyhow... we were sitting around said coffee house talking with a couple of her latest hires -- both from Starbucks stores that had recently closed. She used to have some trouble finding experienced baristas at times -- but nowadays she has her pick of Starbucks veterans who've been turned out on the street or simply walked away from the company -- sometimes after a decade of work... one of her new hires had been at the same Starbucks shop for 14 years -- which I didn't realize because he's been a regular at 'our' (very un-chain) coffeehouse for most of that time.

[spokenward]

boy, there are way too many variables in that article to distill a single shot.

 

I think that you might have to read the article backwards to make sense of it.

 

They are "failing" because they aren't developing new product (old team is gone) and they can't manage new product (stuck with labels that think they should "expose" Alicia Keys and James Blunt in some sort of caffeinated easy listening netherworld).

 

 

For a time, Starbucks offered the labels favorable terms - it did not return unsold CDs, as most music shops do - and in exchange labels offered their CDs at discounted prices. But last year, Starbucks began pushing for another discount on its purchase of new releases, knocking its price to $8 from $8.25, even while seeking the right to return up to 20 percent of its orders, according to people briefed on the company's negotiations.

 

 

I read that as saying that the returns are the problem. It's a devil's bargain, a retailer can't let suppliers determine their assortment. But the terms are so unappealing that they will get what the labels are willing to place under those terms.

 

I also wonder how many visits it takes for a customer to pop for a musical offering. If Starbucks visits are down (they are), are customers making sense of the assortment before those items are gone?

[Billster]

 

For one thing, she's too in touch with her clientelle to think that the young customers buy anything so last century as a CD...

 

 

Starbucks probably shoots for an older clientele. The thing I've noticed about Starbucks is that they are turning into Dunkin Donuts. There doesn't seem to be any impetus to keep people in store after the purchase. The independent coffee shops have better seating, better lighting and decor, ceramic cups. People go into Starbucks, get a paper cup full of caffeine, and walk out. You can't sell merchandise to people who are most concerned with leaving quickly.

[blue2blue]

One of the baristas at the aforementioned one-off shop is from Boston and he is totally devoted to Dunkin Donuts coffee -- which he'd been ordering online. If you press him, though, he'll admit it's a 'comfort food' kind of thing.

[Kerouac]

As the twig is bent... My favorite coffee house has a barista-driven jukebox (actually online subscription service) and lets the (generally) young baristas pick it. Of course, they're not selling music -- only expensive coffee drinks and even more expensive pastries. The boss is always looking for sensible ways to expand -- she added an international news rack -- probably in the top two or three in a town of a half million people -- but I suspect there's no way in heck she'd go into the CD sales business. For one thing, she's too in touch with her clientelle to think that the young customers buy anything so last century as a CD... BTW... the baristas tend to pick a pretty eclectic mix (they are strongly discourage from playing aggressive rock or punk -- which doesn't stop the Ramones from sneaking on occasionally). But it's a real mix: a lot of classic jazz -- and NO Kenny G, which would probably start a small riot if it did get on -- a lot of post-rock type stuff from folks like Iron & Wine, Belle & Sebastian -- and a lot of 60s music (typically picked by someone born in the 80s), everything from the Nick Drake (which always seems to win new fans... too bad the guy couldn't get arrested during his short lifetime) to early Jefferson Airplane or Paul Butterfield. A while back they played the soundtrack from The Trip ... that was pretty cool. It took me about half the album to finally identify it. (The jug band tune, "Psyche Soap" -- which sticks out of that soundtrack like a sore thumb -- was the giveaway, IIRC.) Anyhow... we were sitting around said coffee house talking with a couple of her latest hires -- both from Starbucks stores that had recently closed. She used to have some trouble finding experienced baristas at times -- but nowadays she has her pick of Starbucks veterans who've been turned out on the street or simply walked away from the company -- sometimes after a decade of work... one of her new hires had been at the same Starbucks shop for 14 years -- which I didn't realize because he's been a regular at 'our' (very un-chain) coffeehouse for most of that time.

 

We have a couple of shops like that in the Greater Cincinnati Area, and one of them is right down the street from my house. I've played acoustic sets there, go in for coffee, to visit friends, drum circle nights, whatever. They'll let uyou bring in your OWN ceramic cup to hold onto for you. In the back they have a huge selection of CDs, LPs, and casettes and they'll play local artists who give them CDs and demos. It's a great place to go, and this is from an ex-Starbucker.

[Philter]

 

One of the baristas at the aforementioned one-off shop is from Boston and he is totally devoted to Dunkin Donuts coffee -- which he'd been ordering online. If you press him, though, he'll admit it's a 'comfort food' kind of thing.

 

 

 

Why is it that Dunkin Donuts coffee doesn't taste quite like coffee? Anyone else notice that?

 

As far as Starbucks is concerned... I would be more worried about people's romance with burned beans ending. It's hard to relax with a Starbucks coffee when it tastes like engine oil.

 

Independent coffee shops are always the best choice when you can find them. Chain coffee is... well, chain coffee. You'll never be surprised at a Starbucks. Maybe they should let their franchises pick out local bands to display on their own and go back to what started them out as a cool independent.

[Kerouac]

Why is it that Dunkin Donuts coffee doesn't taste quite like coffee? Anyone else notice that? As far as Starbucks is concerned... I would be more worried about people's romance with burned beans ending. It's hard to relax with a Starbucks coffee when it tastes like engine oil. Independent coffee shops are always the best choice when you can find them. Chain coffee is... well, chain coffee. You'll never be surprised at a Starbucks. Maybe they should let their franchises pick out local bands to display on their own and go back to what started them out as a cool independent.

 

I'm posting from an independent coffee shop (actually very smll chain of three stores) and the the coffee is {censored}ing terrible. They're also Christian based and there is terrible praise music and "god bless" greetings and goodbyes...

 

I think I'll go to the bar instead...

[Frantag]

If you ever make it to Annapolis, MD, there is a great coffee place downtown called 49 West. They have excellent coffee and food. There is good quality live music on Friday and Saturday nights and it just has a "nice to be here" vibe. I only wish it were in my neighborhood.

[Anderton]

Starbucks carrying CDs is sort of like Harmony Central opening a forum on gardening tools.

[Ani]

Starbucks carrying CDs is sort of like Harmony Central opening a forum on gardening tools.

 

[Ani]

It's funny, my son is a BIG Starbuck's fan and I tend to get drug into various locations of the chain throughout the city when we are out. I haven't looked for them, but I have not noticed ANY counters, racks, or showcases where CD's are available for purchase. The location most frequently visited is inside of a Barnes and Noble bookstore, so there may be a conflict of interest with B&N retailing music. The other 2 locations, however, are detached from other businesses and I've never noticed any CD's for sale.

 

I had my daughter and a friend of hers out in Lawrence, Kansas about a week ago and stopped in at Borders Books to check their book selection out. While inside, I noticed there was a Perfect Cup coffee shop located on site. Having known the "Perfect Cup" name from a small coffee shop, no longer in business, that had been a great place to go to not far from my home; I knew they served and excellent cup of coffee. I bought my daughter, her friend, myself and my son some REAL Latte that was FRESH and rich in flavor; it was a real treat for a change. Starbucks is overpriced and overrated.

 

Personally, when I'm by myself, I won't bother going to Starbucks... There are a few convenience stores where I know I can get great cups of coffee with a variety of choices in select blends. One has hazelnut, vanilla bean, and about 8 other flavors that are made from fresh ground beans daily.... It's a privately owned convenience store, but one that I will go out of my way to visit when the mood strikes me. Maybe they should look into CD sales.

 

When I'm in the mood to buy coffee, I'm usually not looking for music to purchase.

[Kendrix]

Ive never bought any music there. With such a limited selection it made me feel like the material was being shoved down my throat. I need to browse when buying music. I guess that may be old school.

 

FWIW-The best coffee shop I've ever experienced is on the south side of Great Barrington Mass. Its got a juke box and lots of hippie acoutraments. Lots of old overstuffed arm chairs and magazines.

Lots of space.

Its got vibe.

 

IMHO Starbucks never had any vibe at all.

However, I do like strong coffee.

Had some Jamacan me crazy today -very nutty.

Ramble on....

[Ernest Buckley]

making sense of the music biz at this point is... pointless... it is changing so dramatically fast that its impossible to narrow it down to a couple of issues... there is so much good music out there and its a very exciting time to be involved in music production...all you need these days is myspace and youtube for exposure... obviously it helps if you can write a tune

[the stranger]

 

Starbucks carrying CDs is sort of like Harmony Central opening a forum on gardening tools.

 

 

I disagree. High traffic areas are the best place to sell anything. And I've suggested the same.[1]

 

 

In reference to the original subject:

 

It's not the selection, it's the price. The price is killing CD (physical media). CD and album production costs have decreased exponentially, yet CD prices have stayed the same for what, 20 years? Come on, people have the ability to burn CDs themselves (for super cheap) and download music for free. You have to compete with that. The truth is the label/distro has to lower there cut and make up the difference in higher volume.[example]

 

If Starbucks, Gas Stations, etc used this strategy...with the prices I'm talking, they would succeed. Imo. Your mileage may vary. Tax and title extra.

[Anderton]

 

 

 

And I think if we opened a forum on gardening tools in the high-traffic world known as HC, we'd get quite a few posts because I'm pretty sure we have people who are into gardening. But it would "dilute the brand." Where does it stop--Starbucks selling condoms because lots of people have sex, and high traffic places are the best place to sell anything? Just because Starbucks CAN sell something, doesn't mean they SHOULD if it has a negative effect on the brand.

 

Starbucks' "big deal" is that they sell their special, secret sauce coffee. So if they sold special, secret sauce CDs--which they did, at first--they could at least claim to be maintaining their cachet. But once they started selling Buddy Holly's greatest hits with the same songs as on other Buddy Holly compilations (they dude didn't live long enough to leave behind a huge body of work) at a higher price than regular CD stores, that not only led to decreased CD sales, but a dilution of their "specialness." If you want to be special, then everything you do needs to be special. Like if they'd sold music on USB sticks, they'd have a better shot...when you think of the office workers going in for their morning coffee, I bet more would say "Wow, I could use a memory stick, and I like the music on it" than "I think I'll buy a CD along with my coffee."

 

Just a thought...

 

But I also agree with you 1000% about pricing. If CDs had started selling for $9.95 four or five years ago, I think we'd be dealing with a different landscape. Any musician who put out a CD during the 80s can tell you about the contracts that valued CD royalties based on the same pricing as CDs and vinyl "because hey, it's technology, we know the prices are going to go down, and we don't want to get stuck paying royalties based on an $18 price if it's selling for $12." Yeah, right. I still believe that stealing music became the norm only after companies failed to deal with the new realities, so consumers took things into their own hands.

[the stranger]

And I think if we opened a forum on gardening tools in the high-traffic world known as HC, we'd get quite a few posts because I'm pretty sure we have people who are into gardening. But it would "dilute the brand." Where does it stop--Starbucks selling condoms because lots of people have sex, and high traffic places are the best place to sell anything? Just because Starbucks CAN sell something, doesn't mean they SHOULD if it has a negative effect on the brand. Starbucks' "big deal" is that they sell their special, secret sauce coffee. So if they sold special, secret sauce CDs--which they did, at first--they could at least claim to be maintaining their cachet. But once they started selling Buddy Holly's greatest hits with the same songs as on other Buddy Holly compilations (they dude didn't live long enough to leave behind a huge body of work) at a higher price than regular CD stores, that not only led to decreased CD sales, but a dilution of their "specialness." If you want to be special, then everything you do needs to be special. Like if they'd sold music on USB sticks, they'd have a better shot...when you think of the office workers going in for their morning coffee, I bet more would say "Wow, I could use a memory stick, and I like the music on it" than "I think I'll buy a CD along with my coffee." Just a thought...

 

I don't disagree with these points, I still wonder if it's still just a pricing issue.

 

It's funny because all that gas station talk and is wasn't until this thread that I realized Starbucks has the same high traffic component I think can be capitalized on.

 

Why is it so many important people in the industry (such as yourself) see these issues and have solutions, but nobody is listening? Don't these subjects come up at these various trade shows and such? Do record labels interact with the rest of the industry or are they hermit corps?

[Billster]

If you want to be special, then everything you do needs to be special.

 

Ask Steve Jobs about Gil Amelio! (Dons fireproof suit)

[Billster]

 

Why is it so many important people in the industry (such as yourself) see these issues and have solutions, but nobody is listening?

 

 

Because the previous model was very generous to the current power brokers, and they're going to cling to it until they strangle the thing. See also: U.S. Auto Industry, 1974

[doug osborne]

Starbucks saves $millions every year by having their own music licensing. Their music sideline was started simply to not have to pay ASCAP/BMI/etc. to play music. They negotiated better deals with labels and artists (legitimate thing to do), and this led to their current music business.

 

They threw a few CDs on the counter and it produced instant profit. They licensed a few recordings for exclusive distribution, making money for a while that Wal-Mart and Target didn't.

 

They are caught right now in the decline of CD sales in general, but they won't lose money if they don't sell another CD - they just won't make the added profit. Still, they're making $millions from this. As above, B&N sells coffee to go along with their books and CDs, but they won't go out ouf business if they stop selling coffee.