Appetite For Disruption

Starbucks Downsizes its Entertainment Ambitions (With Update)

It was just a few months earlier I was predicting how Starbucks Coffee Company's Starbucks Entertainment unit was overreaching.

In the midst of CEO Howard Schultz's revamping of the company Starbucks has decided to hand over the music operations for its Hear Music label venture to partner Concord Records.

But I think it should be emphasized that Starbucks's music initiative lost steam because they lost touch with what made their music effort cool to begin with.

1. Starbucks concentrated on music that gave its stores a cool vibe: jazz, blues, classic R&B, classical, singer-songwriters.
2. The Starbucks customer spends a lot of time in the store: ordering, waiting on line for their order, and, if they choose, drinking their order in the location (or just working on their laptops).
3. Starbucks, while they have some teen customers, is clearly more focused on the adult market.  This is a demographic that is not as active a music consumer as teens and college-age students.  They want the commuter, the office worker, the business traveler.  Starbucks, when they practiced a more honed musical aesthetic, found an easy audience in these demographics.

When any brand seeks to make themselves an arbiter of cultural taste the focus needs to be tight.  It can't be all things into all people.  When Starbucks Entertainment was launched in the wake of the Genius Loves Company Grammy-winning triumph it undid much of the good work the Hear Music team had accomplished in building to that particular moment.  It chose more mainstream material and allowed themselves to get involved with labels trying to market new acts which did not fit within that previous core aesthetic.

It's a cautionary tale.  A strong focus on music to help drive profits and branding initiatives has to take into account the brand's customer base and how that customer interacts with the brand.

UPDATE:  Great minds think alike; Charlie Moran from AdAge.com's Songs For Soap Blog is also thinking the Hear Music division of Strabucks suffered more from lack of focus.

And, as large as their ambitions were, I'm also now thinking that Hear Music got mis-directed.  All of that early emphasis on jazz, classical, folk, blues, and singer-songwriters; think how much influence the company could have wielded (and may yet still wield) in introducing and/or touting artists of significance in those more eclectic genres.  Their customers are yearning for something great, something special, out of their music.  And even with the instant familiarity of the artists in recent projects you just can't create a cultural phenomenon out of a normal Paul McCartney album release, nor out of a live James Taylor greatest hits record.  And, sadly, lest we forget, a lot of the buzz behind Genius Loves Company started happening in the culture only once Ray Charles passed away.  That ain't gonna happen twice.

Whither the Car Stereo

I caught an article today in today's USA Today on how consumer electronics companies are now offering CD-player-free car stereos.  These are not OEM-installed systems, and automakers would be wise to continue having in-dash CD players as standard features on new vehicles.  Their customers have invested heavily in CDs over the past 25 years, despite the sharp downturn in CD sales this decade.  Even rampant downloaders do a lot of burning music to CD.

Car makers should definitely look to add on options which allow MP3 player owners to use their players in conjunction with car stereos.

As it is, there are still plenty of cars with cassette/CD players, and there are plenty of peripherals one can buy to stick an MP3 adapter into the cassette deck.

The transition to an all-digital music economy is moving rapidly, but those who stick with physical product aren't necessarily Luddites to be shunned, just as people who want to shop at brick-and-mortar stores for certain items they can buy on the web aren't technologically backward.  They just have preferences which are ingrained, preferences which shouldn't be ignored by marketers.