Monday, March 12, 2007

Freshgroundcore: Starbucks launch label

While nobody would begrudge SubPop launching a boutique label, there's not going to be universal delight at the reports that Starbucks is taking the next step: from flogging CDs to manufacturing them.

Starbucks has actually had a music division since acquiring Hear Music in 1999; before Starbucks invested, Hear was trying to push the idea of customers burning bespoke CDs in small booths in its stores. Since then, the brand has been used on a Starbucks-underwritten radio channel on XM. And so, inevitably, it becomes a pressing concern. Equally inevitably, the big labels are scoffing:

[E]xecutives at record companies were doubtful that Starbucks would do any better at breaking new artists than a traditional label.

"They got the retail and marketing distribution to leverage," said one executive who asked not to be named. "But are they going to sell a million records? No, but they probably don't need to."

Geological experts tell us that the resultant "well, duh" generated by this off-the-record quote could be felt as far away as Antarctica - Starbucks approach to music is the same as its approach to the bags of coffee beans it sells in its stores. They're not trying to compete with Makers Mark; its all about selling high-margin, quality stuff and making extra revenue from people calling in to buy a frothy coffee.

There are claims in the New York Times today that they're trying to line up Macca. Again, more derision from a confused, anonymous exec:
"It'll be interesting when they realize it ain't easy putting out records," said another senior record company executive, who asked not to be named. "Are they really taking a chance? On who? Paul McCartney?"

Of course Starbucks are no more likely to put out an edgy queerpunk album by an unknown band from Tuscon than they are to replace their coffees with kumqat root juice. But lets face it, senior record executive, there aren't many RIAA companies who are releasing expectation-confounding confections, are there? And if your banker artists like the McCartneys decide to go and do their work for the Barrista boys in future, what does that do for your financial model? Starbucks' initiative is probably a far more serious threat to the big labels' bottom line than peer to peer networking. Of course, they don't see that.