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Continuing its entry into the world of entertainment, Starbucks is partnering with Concord Records, a jazz label, to produce a new Ray Charles CD that will be sold exclusively at the chain's cafes.

The album features the legendary singer doing duets with artists that include Elton John, Norah Jones, B.B. King, Diana Krall, Michael McDonald, Johnny Mathis and Willie Nelson. It is scheduled to be released on August 31, and is Charles' first new album since 2001.

Starbucks clearly is star-struck. It was just a week ago that the company opened a new store in Santa Monica, California, 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. In that case, 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. 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.

Starbucks already offers high-speed wireless Internet access in some 2,700 stores and 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:
This is an intriguing pattern. On the one hand, Starbucks undoubtedly sees revenue in the music business. But there's also something else at work here…probably some connection that Starbucks sees in its customer demographic.


And clearly Starbucks isn’t the only one hearing the siren song…