HITS Daily Double
"This is a vote of confidence in the music consumer and their continued interest in being provided access to great music."
——Starbucks Prexy Ken Lombard


Starbucks’ Ken Lombard and Concord Music Group’s Glen Barros on Hear Music
Earlier this week, Starbucks and Concord Music Group announced plans for a new record label, Hear Music, to debut later this year, selling albums in all the coffee giants’ outlets as well as at traditional retail stores. Starbucks Entertainment President Ken Lombard and Concord Music Group President Glen Barros divulge all to HITS’ own caramel frappuccino fan Roy Trakin, who can barely stay awake, even in his caffeinated state.

When will you be announcing the first artist signed to the label?
Ken Lombard: We’re not in a position to make any announcements with respect to artists. We don’t speculate on rumors, and I would not use the N.Y. Post as a source, if I were you. We don’t have any timetable other than, our hope is, by the end of the year, we’ll make the announce as to who our artists will be.

How many releases are you looking at over a year?
Lombard: We’ve had a lot of conversations about it, and frankly, right now, we’re looking at eight a year, and we’ll build upon that number going forward.

Are you going to continue putting out compilations geared to Starbucks?
Our commitment will continue, from a customer perspective, they’ve come to expect extraordinary music coming from us featured inside our stores. That’s one of the reasons it feels like a very natural next step for us. As a result of our success and credibility with our music, not only in the industry, but in our stores, there were a lot of artists calling us, and that began to increase to a level where it felt like we were ready. As we looked at it, not only was it a natural next step to segue into a label, but the relationship we built with Concord, starting with Ray CharlesGenius Loves Company, made them the natural partner for us.

What’s in it for the Concord Music Group?
Glen Barros: This platform enables us to connect artists, both established and new, with the widest possible audience. The industry is, of course, feeling a lot of stress and the consumers have been generally disconnected from the music business. When you have 44 million people walking through Starbucks doors every week, they can be introduced to the kind of music we will be producing. To utilize that alongside all the other things we’ll need to do as a record company, both conventional and unconventional, that’s a very powerful took to help us fulfill our goal of connecting the artist with the audience.

Are you planning on placing burning kiosks within Starbucks outlets?
Lombard: If you go back a couple of years ago, we introduced media bars to our customers in the Hear Music coffee houses. We currently have the one in Santa Monica and we have opened three more in San Antonio, Miami and Bellevue, WA, outside of Seattle. That was the first step in our digital strategy. We decided it would not be part of a rollout plan in our existing Starbucks stores. Customers love it. It’s a very exciting opportunity. Our next step was the announcement of a relationship with iTunes, establishing our own entertainment area on their site. We just want to continue to tweak the concept. If you understand how Starbucks does things, from a design perspective, it’s a slow process for us. We want to make sure we get it right. We’ve tried to give each store an opportunity and allow us to learn, not only from the customer side, but from the operators’ side, as we continue to grow that business.

Do you see any conflict with traditional retail in selling albums through Starbucks?
Barros: We believe that this label is good for the entire industry, including retail. There is no exclusive afforded to Starbucks… no exclusive tracks, no timing, nothing like that. They will have the same album as retail at the same time. What we’re really building on is the experience of albums we’ve released in the past. We saw that the awareness created by Starbucks really helped everybody. Buyers who maybe weren’t going to record stores, but found themselves in a Starbucks sometimes a couple of times a day were becoming aware of these records and talking about them so that the word-of-mouth was tremendous. Some of those sales go elsewhere.

At Starbucks, we’ve really established a great track record in our ability to work alongside other retailers. Take the Ray Charles album. That was a true collaboration with Concord. We always tried to make decisions based on what was in the best interest of not just Starbucks, but the music consumer and the artists themselves. That was a record we marketed not just in Starbucks, but at traditional retail.

What about the price point? You’re obviously selling the album for more than you can get it at Best Buy, Target or one of the big box retailers.
Lombard: Starbucks’ pricing strategy will essentially remain the same. We think that’s what fits for our profile. Any decisions that we make on music that goes inside of our stores will obviously be arms-length and not necessarily what other retailers decide to sell our albums for.

Will the roster be a mix of older and newer artists?
Lombard: We’ve clearly recognized what the sweet spot of our audience is when it comes to the Starbucks customer. What we realized early on was providing the right music for our customers in a broad array of genres. We fully anticipate in moving forward that there will be a lot of similarities in our strategy for a new music label.

Within multiple genres, there will be both new and established artists.

The industry scuttlebutt has you going with UMGD as the distributor.
Barros: There’s been no specific plans yet. This is a brand-new company. We can go with any distributor. We’re not making any announcements yet.

From Starbucks perspective, we have asked Concord to look at the various options, but we haven’t made a decision yet as to where we’re going to land.

It’s an interesting time to get involved in the record business.
Lombard: This is a vote of confidence in the music consumer and their continued interest in being provided access to great music. That’s been the commitment we’ve had all along. We entered into this business to be able to provide that. We felt we were in a very unique position to transform the way music was discovered and delivered by our customers. With the success and credibility we’ve built, we feel we can now extend our voice and that of Concord, through the Hear Music label, to the music consumers not only in Starbucks, but traditional retail as well.