Starbucks, which has been scaling back its once-grand ambitions to turn itself into an entertainment hub, is about to shrink its plans yet again. We hear that by September, the chain will have dumped almost all of its in-store music retail offerings.
That means no more "spinner" racks offering multiple CD choices to latte-buyers. And that also means no more gift cards and promotional giveaways for Apples iTunes. Instead, we're told, the coffee chain will offer just four CD "slots" per store. But it will also continue to offer free Wi-fi access to Apple's online music store and may continue to try to sell entertainment online.
The move shouldn't be a huge shock: Starbucks has been rethinking its forays into entertainment this year while it tries to restart growth in its core business. And its efforts to sell music in particular have come under heavy scrutiny: In March, a scathing New York Times article reported that the chain was selling just two CDs per store per day. A month later, Ken Lombard, the head of the chain's entertainment business, was bounced out, and the company handed management of its Hear Music label, which had just started releasing its own CDs, over to Concord Music Group.
I recall chatting with a Starbucks manager who had overheard me talking about the chain's partnership with Apple last year. He asked me whether I thought that Apple and Starbucks had enough crossover customers, which I did (and do): I mean, let's face it, anyone who's willing to pay $5 for a cup of over-roasted coffee is likely an ideal customer for a company that sells expensive electronics devices. But I have always been concerned about Starbucks' too-strenuous moves into the music business, and the best example is the horrific Starbucks location in Bellevue square, which has morphed into a Tower Records with a coffee bar. My hope is that this news means that store will go back to being what it used to be: A really cool place to hang out and get some work done.
I still think Starbucks doesn't get it. They should be replicating the Italian café experience (you know, but with Wi-Fi). All this side business junk is taking away from the core experience.