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September 13, 2004

Day Five: Santa Monica

After the nail-biting excitement (and bone-tired exhaustion) of Thursday's Magic Mountain escapades, Friday got off to a very, very relaxed start. I'd crashed with Chris and Todd, so after rolling out of bed I took Chris out for coffee to catch up, post-wedding.

(She's still glowing.)

After coffee, I headed out to Santa Monica to check out Starbucks Hear Music. This store is a prototype of Starbucks' fledgling music efforts. It's a traditional music store (it stocks CDs), but it adds a digital twist by allowing patrons to listen to anything the store carries. Hear Music listening stations are basically flat-screen, wall-mount PCs with headphones and a bar code scanner. Grab a CD you're interested in, slap on some headphones, and pass the CD UPC under the listening station's optical scanner. From there, you'll be able to rock out to any and every track on the disc.

Cooler still are the custom CD burners (you can see a guy sitting at one in my photo, above). These stations allow you to browse and choose from over 150,000 songs in the Hear Music library. You can build a custom playlist right at the station, and then have a CD burned while you wait. You pay a basic cost for the CD, plus a per-track fee. It's slick.

The burner is the thing that Starbucks is most interested in. As music goes increasingly digital, music stores are becoming less and less vital to the music-buying public. Starbucks is essentially trying to leverage its steady volume of affluent and loyal customers into a new line of business for the coffee chain. I think it's an interesting strategy, provided they can get the merchandising issues worked out, but I'm curious as to how long-lived the value of these burners can be. The way I see it, Hear Music is competing with iTunes (catalog: 1,000,000 and counting), Rhapsody, Napster, Launch (Todd would kill me if I left them off this list), and, of course, MSN music. This means that Starbucks' music effort is really targeting coffee customers that don't have access to (or don't know how to use) these other services. And, to me, that number seems small ... and dwindling. Plus, the burners don't support portable players (I can't, for instance, buy a song at Starbucks, plug in my iPod, and have it copied over).

Isn't the CD dying?

Starbucks is rolling out the burners across 10 stores here in Seattle over the next few months. I'll be watching with great interest.

(And finally, a big shout out to Paul Skikne, a great guy and former client of mine. Paul: you made the blog!)

UPDATE, June 5, 2006: One or more of the original hyperlinks on this page expired, and has been dereferenced. The hyperlinked text is now underlined.

Posted by Gavin Shearer at September 13, 2004 9:38 AM. Posted to Travel.

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