Starbucks Says Expands Music Focus to New Artists

By | April 5, 2005 at 12:00 AM

Los Angeles – Starbucks Corp. said on Monday it will start selling music by unknown artists in a move that strays from the chain’s reliance on big-name stars to sell CDs at its popular coffee shops.

Starbucks – whose success selling music by well-known artists including Ray Charles and Alanis Morissette has made it a thorn in the side of traditional music retailers – next month will begin marketing and selling a CD by up-and-coming rock group Antigone Rising at its more than 4,400 U.S. stores.

The CD, called “From the Ground Up,” will cost $12.95. It was produced by Warner Music Group unit Lava Records.

Similar to other arrangements the chain has had with record labels and artists, the CD will be sold exclusively at Starbucks for a still undetermined period, according to Ken Lombard, president of Starbucks’ entertainment division.

Starbucks and Lava Records will share proceeds from the CD’s sales, though Lombard did not give specifics of the arrangement. Starbucks will continue to benefit from CD sales even if the album goes on to be sold elsewhere, Lombard said.

To promote the all-female band’s CD, Starbucks will post signs and play the music in its stores and on its XM Satellite Radio Holdings Inc. station.

Interest in the CD will also likely get a boost from the band’s recent appearances on cable music network VH1, a unit of Viacom Inc.

U.S. album sales have been pummeled in recent years by online piracy and weak spending, though price cuts and increased promotion of commercial online music services have helped industry sales recover somewhat.

Still, dissatisfaction – particularly among older consumers – with Top 40-oriented traditional music retailers has allowed Starbucks’ growing music business to flourish.

In addition to its own satellite radio station and sales of proprietary CDs, Starbucks last year unveiled an initiative that allows customers at some of its stores to burn their own custom CDs as they sip coffee.

But in its biggest music success to date, the chain last year backed the Grammy-winning Ray Charles CD “Genius Loves Company.” Of the 2.86 million copies that album has sold, nearly 25 percent of those sales were at Starbucks, according to tracking firm SoundScan.

Given such a track record of success with its music business, Starbucks shrugged off the suggestion that putting its marketing and financial muscle behind a band of relative unknowns was a risky move.

“We listen to what our customers are looking for, and they want to discover new music,” Lombard said in an interview. “This launch is going to be received by our customers in a big way.”

Starbucks is so confident of its success, in fact, that it plans to launch a new CD series called “Hear Music Debut” aimed at selling music by new artists. “From the Ground Up,” is the first of the series.

Lombard did not say when customers can expect to see the next CD in the new series, saying the chain was not committed to a timeline but to “finding quality opportunities.”

He added, however, that “there are a number of discussions that are going on right now.”

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