Say goodbye to those days when you could pick up an Adele CD with your Caramel Frappucino: Starbucks will dump almost all of its in-store music offerings over the next three months, according to sources. This news shouldn’t come as much of a surprise, given that the coffee company has been slowly inching away from its entertainment-business aspirations over the past few months, but it probably isn’t making music execs all that happy, given that Starbucks was apparently moving some 4 million CDs a year. [Silicon Alley Insider]
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@StuntKockSteeev: Golf clap.
As implied by loudersoft, this is clearly the last stage in the returning CEO’s (Howard Schultz) reversion of the company’s mission back to coffee. Which is fine.
What makes me suspicious, though, is that this implies that Starbucks’s music business was never that great and that its sales were always overstated. I mean, it would be one thing if SB was heavy into music for the last 15 years, but really they’ve been hot-n-heavy for less than five. Their big moment with the Ray Charles disc (co-released by Conchord) was in 2004, and they only started releasing discs by themselves (McCartney, Mitchell, Taylor, etc.) last year. You don’t abandon something like that if it’s at all profitable. Which suggests that it never really was. If we were having this conversation a year ago, everyone would be saying (based on anecdotal evidence), “I guess Starbucks is the only retailer turning a profit in B&M CD selling.” Well…maybe not!
It reminds me of the moment Steve Jobs came back to Apple in ‘96-97 and dismantled huge swaths of business they’d taken on just in the last couple of years; Apple had been licensing its OS for less than a year when Jobs discontinued the entire “Mac clones” business. Schultz probably has a similar aversion to anything off-brand. In both cases, clearly the company wasn’t making enough in the side business for it to be worth persisting.
Keep the CDs - get rid of those nasty refrigerated egg sandwiches!
@Chris Molanphy: I wonder if Starbucks’ attempt at cross-promotion actually ended up costing them more in the long and short run. After all, they were positioning themselves as a “lifestyle brand”. When they began releasing discs themselves, they appeared to be filling the gaps in their brand with upper-and-middle-tier artists. Those don’t come cheap.
Lastly, and most obviously, I’m sure they recognize that the music business is still the music business — that you can’t exactly run a distribution & marketing arm for a coffee company in the same way you run one for music.
This makes sounds right, I found it odd that in the last month or so, you couldn’t buy a CD of theirs (I am curious to hear the live Simon and Garfunkel CD…honest!) in any Starbucks in Ireland, or any store (right word for a coffee selling place/enabler?) I came across in Germany…when I asked the people working in any of the stores, they all looked at me as if they had never heard of Starbucks selling CDs. Was this only as US thing?
I thought at one time Starbucks was the number one brick-and-mortar music retailer in the U.S. Why abandon something which is working?
Now if we can just get them out of the coffee game and we’ll be good…
@loudersoft: Being king on a pile of shit still means your on a pile of shit. Best for them to just cut the inventory losses and work on regaining the coffee share they’ve lost to Dunkin Donuts.
I’m surprised, as it doesn’t seem that the music is taking up space that could be easily converted to food/coffee sales. Most of the racks take up what I would call dead space. My guess is that it must have been an inventory/shrinkage nightmare.
I’m guessing that it goes back to Starbucks’ desire to streamline their operation in a competitive coffee market. It’s a style choice — they’re afraid to continue to make “lifestyle offerings” in an era where they are fighting to maintain control of their market share. They’re trying to combat increases in shipping/cartage fees of their inventory to stores in order to maintain the bottom line. The increase in gas = potential increase in price. Increase in price = people turning to McDonalds or Dunkin Donuts = Starbucks in serious trouble.
@How do I say this … THROWDINI!: The fear that someday, I may pay $7 for coffee, while showing interest in Adele, just caused some serious shrinkage on my end.