Monday, September 24, 2007
One More Cup of Coffee Before I go
So where is the money in the music business? Where do artists make their bucks?
Yesterday the channel was clearly defined and the money came through selling records and although the model still holds water times are clearly changing. On the artist side we have seen Paul McCartney turn his back on EMI and sell his latest album through Starbucks, Prince gave further sign of the times with his Mail on Sunday giveaway of his latest album and now we hear that Madonna wants to get out of her Warner deal, even if it costs 50 million, and line up with her tour promoters. For the major acts bums on seats and merchandising make money adding music to this make better sense that leaving with the ailing record producers.
We have also raised the question on free ad paid downloads from Sprial Frog and the growing no DRM movement. Times certainly look bleak in the traditional music houses!
Now Starbucks plan to give away 50 million free digital songs to customers in all of its domestic coffee houses to promote a new wireless iTunes music service that's about to be launched in the US. Between October 2nd and November 7th their 10,000 U.S. stores will hand out about 1.5 million "Song of the Day" cards each day. The cards can be redeemed at Apple Inc.'s online iTunes Store for 37 artists which feature songs from the first two to sign on with Starbucks' Hear Music label Paul McCartney and Joni Mitchell along with Joss Stone, Dave Matthews, Annie Lennox and Band of Horses. The first song will be Bob Dylan's "Joker Man."
Starbucks will also start selling iTunes digital release cards that allow the download of a full album and bonus material. KT Tunstall's "Drastic Fantastic" will be one of the first two featured albums to be retailed this way. Starbucks also will offer a limited-edition re loadable purchasing card that includes two free iTunes downloads when customers register their cards online.
The from October Starbuck’s icon will also light up on the Apple iPhone whenever a user is within range of a Starbucks shop's Wi-Fi signal and consumers with the devices or a laptop with iTunes software will also be able to use the signal for free to browse and buy other iTunes music. This service will be launched in Starbucks 600 shops in Seattle and New York and in San Francisco in early November with plans for it to be in a quarter of its US stores by the end of 2009.
So what does this mean to the booktrade? We may see what many believe is the inevitable – STARBOOKS. In a crowded coffee market it is obvious that these savy retailers need to broaden their offer, build further loyalty and use their muscle to offer new innovative services. Do we think books are different? Today they may be but as digital options increase then so does the threat of the new entrant. As for the artist versus the author, who would have thought Stabucks would woo artists such as McCartney and Mitchell.