business news in context, analysis with attitude

Starbucks Corp. opened a new store in Santa Monica, California yesterday - a store that not only sells coffee but allows consumers to use Hewlett-Packard computer equipment to record music onto customized CDs. The company has named the unit the Hear Music Coffeehouse.

Five songs cost $6.99, with additional songs going for 99 cents each. Each disk can take up to 80 minutes of music; while customers now can buy only single tracks, eventually they'll be able to buy entire albums. According to Starbucks, it has access to 10,000 albums and some 100,000 songs.

The company said that it views this new business as providing real revenue stream. Ten more music coffee house stores will roll out in Seattle, and the company hopes to quickly roll out the service from there, hopefully being in 2,500 units within two years.

This is just the latest move by Starbucks into the high-tech arena. The company already offers high-speed wireless Internet access in some 2,700 stores. The company acquired Hear Music - which operates four music stores in Santa Monica, Palo Alto, Berkley, and Seattle - about five years ago. And it has been selling CD compilations under the Hear Music label for several years.
KC's View:
We admire Starbucks enormously, in part because it seems to keep finding new angles on its traditional business and in part because it seems to have a highest-common-denominator approach to marketing.