Cannes (France): Music and coffee lovers around the world are in for a treat. The king of the coffee shops, Starbucks, plans to start extending its unique USA blend of coffeehouse plus music store to its 10,000-plus outlets around the globe.
"We are very committed to growing our international strategy in 2006," Starbucks head of music Ken Lombard told participants at the influential MIDEM music trade fair that is being held this week.
But Starbucks fans outside the US shouldn't start salivating yet as the group hasn't disclosed when or where it will start introducing its latest music-rich coffee shops.
The Hear Music Coffeehouse concept offers customers the opportunity to browse and buy pre-packaged CDs or download and create their own personalised CD compilations at special touch-screen Media Bars from Starbuck's massive one-million-strong music track library. And they can do all of that whilst sipping their cafe latte.
Although Lombard gave no indication how much Starbucks might charge for its premium music service outside the US, customers currently pay $8.99 to download their first seven songs and $0.99 for each additional track. This compares to Apple's iTunes online price of 0.99 cents per track.
The group announced plans in December last year to extend its unique Coffeehouse concept launched in Santa Monica, California, in 2004, to two new locations in San Antonio, Texas, and Miami, early this year.
"We want to provide our customers with great music and the music they're asking for," Lombard told a packed audience here in this French Riviera resort.
Whilst the group isn't giving away any details about when it plans to extend its successful Hear Music brand outside of the US, things could move quickly once it's ready. Many of its coffee shops around the globe already offer hi-speed Internet access to their customers to surf the worldwide web.
Starbucks "is pushing through the (digital) device and format wars, through the difficulties that inevitably come hand-in-hand with cutting-edge digital media to create a unique in-store retail opportunity," Lombard pointed out at MIDEM.
Starbucks has been getting steadily into the music scene since it acquired Hear Music back in 1999. After starting out by offering customers the chance to browse and buy a small number of its own CD compilations, the group now has burst on the music scene big time.
Lombard revealed that it is apparently a potent brew. "Customers love it," he enthused.
The Ray Charles Genius Loves Company and Herbie Hancock Possibilities albums it co-released in 2004 and 2005, respectively, were smash hits, scooping a total 10 Grammy awards between them.
The Hancock album, which was Starbucks' first global release, also scored well in Australia, Japan, Germany and Great Britain.
This helped Starbucks' CD sales to soar 307 per cent over 2004 and 2005 and hit the $3.5 million mark, Lombard said.
But he shied away from disclosing any details about how much the company made from music. Music has "been very successful in our financial performance but we don't release details," he said.
With 10,800 retail outlets in 37 countries, including the US where there are some 5,500, Starbucks is already the world's largest chain of coffee shops.
Rather surprisingly given Continental Europe's penchant for coffee, the Japanese appear to have embraced the caffeine experience with a vengeance, coming out top of the Starbucks overseas list with 595 coffee stops.
And in Europe, it is the traditionally tea-loving British who boast the largest concentration with 479 locations, a Starbucks spokeswoman said.
Who knows where the music experience could lead Starbucks. Asked whether Starbucks intends to start its own record label, Lombard said it was too early to tell but added that the company is looking at this opportunity.
But when EMI senior exec Ted Cohen jokingly asked Lombard at a MIDEM session, "So does Starbucks still sell coffee?" Lombard replied with a firm, "We will always be a world-class coffee company first and foremost."
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