So have Starbucks given up on music or are they just refocusing their attention?

When it was announced this week that they were to pull out of their record label Hear Music and hand over this business to their partners the Concord Music Group, an obvious reaction was ‘So what went wrong?’

This news was further compounded when it was announced that the entertainment division was to be put under control of the Chief Technology Officer Chris Bruzzo…geeks in charge of creative development? Surely this means that the whole Hear Music exercise has been a failure?

Well, it hasn’t been a failure in my view. For many of the classic artists, it has worked. First Ray Charles sells over 5million units. Paul McCartney sold more than he could have imagined. Meanwhile, Hear Music tempted Joni Mitchell to record again - which in my book is worth the whole exercise in itself. It also started to offer an alternative distribution and marketing solution for many other artists like the immensely talented and underrated Sia.

Has it been a success for Starbucks customers? Well, from a sonic retail perspective, Starbucks can teach many other retailers how to think about the effect of sound on a consumer’s experience in-store (See posts passim).

Starbucks have a head start on other brands in terms of understanding the power of music in the consumer’s connection with their business. Yet, the news clearly suggests that all is not well at Starbucks. So what can we make of the changes?

Shifting away from CD to digital is good business sense, though making the assumption that the CD is completely dead for the Starbucks consumer is a huge one. There are over 6000 options of coffee in Starbucks, so having a choice of formats for the music - “CD or download madam?” - is not a bad idea.

The bigger challenge for the new head of the entertainment division is how to ensure that the experience in-store is not undermined by this move. The danger is that a shift to digital entertainment will leave the coffee-house experience somewhat muted.

One hopes that Starbucks does not retreat, turn it’s music commitment into yet another music download site and forget that sonic branding is felt most of all by their customers in-store. They may be right to consider promoting books in-store (in fact this makes immense sense), yet the power of music could be better harnessed by brands, Starbucks included.

A thought for Starbucks:
Ever thought about getting local artists to play in-store, so supporting local art, giving something fresh to the customers and positioning yourself as the ‘local coffee house’ at the same time? It means acting small, not acting big.