Site Visit: Starbucks’s Hear Music

With the news reported by Business Week (June 20 05) that Starbucks venture into music has been poorly received we decided to republish a previous review of the Santa Monica Hear Music store from PSFK.

Starbucks has set up 45 stores with a Hear Music service but only a few stores in places like Santa Monica and Miami are dedicated to the model. BW isn’t clear on whether the dedicated stores are not making money but they say:

[The poor perfomance in Austin] could be sign that Starbucks is misreading its customers. The city is full of tech-savvy music downloaders who carry iPods, not portable CD players. Digital music these days means MP3 file mixing and sharing, and that’s not in the business model yet, says digital music analyst Josh Bernoff of Forrester Research Inc. “Starbucks is not going to be a significant contributor to the music economy.”

Besides the unproven premise that customers want to download music at a coffee shop, Starbucks’ fees are high. It costs $2 to use the media bar, $8.99 for the first seven songs, and then 99 cents per song. Apple Computer Inc.’s iTunes Music Store charges just 99 cents a song, and Wal-Mart Stores Inc., just 88 cents.

PSFK SITE VISIT – APRIL 7th 2005

PSFK dropped in on Starbuck’s Hear Music prototype store in Santa Monica last weekend. Starbucks believes that digital entertainment and music is going to be a
significant developer of growth for the company in years to come. The Hear Music store was the first retail venture into this area; opening March 2004.

The front of the store is a coffee counter where we found a regular line of people waiting to order their coffee. Inside we found a store with a clean design and interactive stations. Hear Music doesn’t exactly break the music retailer mold but it does go a way to bring it to a new level.

Each section had a interactive station that would scan most of the CDs we placed under it and they would in turn provide detailed information and listening opportunities. There didn’t seem to be enough product but we were very impressed with the effort to build a music experience: at the end of the room, we found a lovely ’soul story’ montage. 

Along a bench sat several people at interactive stations that helped you burn your own CD. It wasn’t just kids at these terminals – we met a couple in the 50s making a personal present for a friend. The concept is simple: you search for an artist/song, select the tracks available (and there are quite a few), ask the fellow behind the bench some questions if needs be, and click ‘burn’. There’s even a cute coffee cup holder so you can sup whilst you create your masterpiece.

Ok. Create your own CD is not a new idea but Hear Music is designed in a way that makes music accessible to anyone. Or so it seems.

The only thought we were left wondering was: why can’t we buy and download tunes to our iPod from these interactive stations instead of CD burning – maybe we can even recharge our iPod there too? This store was opened mid iPod boom and a new store opens in Miami this year, so we wait to see how they will evolve the concept to handle digital downloads.

PSFK