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Starbucks & HP to serve up music downloads

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By Dennis Lloyd

Publisher, iLounge
Published: Thursday, March 11, 2004
News Categories: Digital Media

“Here’s a deal: Sip on a mocha latte while using headphones to listen to any of 250,000 songs you call up on a computer. Then order the ones you like—burned on your own CD—to go. Who’s the dealer? Starbucks (SBUX ).

BusinessWeek has learned that on Mar. 16,the Seattle coffee giant will unveil an in-store music service allowing customers to do just that, using Hewlett-Packard (HPQ ) tablet computers to make their choices. The first musical Starbucks opens in Santa Monica, Calif., and the service will expand into 2,500 stores over the next two years. “This is not a test,” says Starbucks Chairman Howard Schultz. ‘We’re going for it.’”

Editor’s note: We wonder if the service will be iPod compatible and use AAC instead of WMA. How does the HP branded iPod fit into this service?

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Comments

21

JC, you’re right my figures are 2 years old, but with the current stats you provided, that’s still a lot of people without internet access, who so far haven’t been able to participate in the on-line music revolution. These people will likely be drawn to what starbucks is offering, much more so that to what iTMS and Napster has to offer, and that’s why what Starbucks is doing is so different.

matthew, the internet has much to do with Starbuck’s music service. Let’s face it, why would any of us pay $6.99 for music when we can get them for $4.95 or less through the internet. For those with broad band access, iTMS and Napster is still more convenient even if Starbuck’s price were to be competitive. Starbuck’s isn’t interested in going head to head with Apple and Rio. They’re offering music in a different model. Most likely people who will be drawn to this will be those who haven’t been able to download music off the internet. That’s why internet access will define the market for this service.

DL to mp3 player still leaves out the significant percentage of people who don’t own computers. Yes, you need computers to transfer songs on and off the player. Starbucks might have that feature later, but most of us with mp3 players already buy on-line. In addition, the percentage of people with mp3 players is even lower. Why offer a feature to a smaller segment of the market that will force Starbucks to compete with established services, when they can offer a different model of service to larger segment that have been so far ignored by everyone else. An easier sell to a larger group of people or a harder sell to a smaller segment of the market?

Posted by Starboard on March 12, 2004 at 5:55 PM (PDT)

22

Sorry, Starboard, you can’t have it both ways.  In fact, by your replies, I say you can’t have it all ways.  You should have me proof your posts.

The proof will be in the pudding.

Posted by matthew on March 13, 2004 at 4:51 AM (PDT)

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