Listening to Starbucks Alison Overholt July 2004 Leah Bungo Matt Smith Melissa Fredette

Hear Music Background Howard Schultz, chairman at Starbucks, discovered Hear Music 10 Years ago in Palo Alto, California Starbucks purchased Hear Music in 1999 and launched Hear Music Coffeehouse

Buy CDs and DVDs Burn CDs from a collection of Music (150,000 songs) Purchase Starbucks Hear Music on ITunes Listen to music Promote independent artists

Why…. Starbucks operates in the Coffee shop business – Reaching plateau point? – Market becoming Saturated? Redefine their business Music and coffee go together – Personalized products – created individually

Walt Disney (Cartoon Studio) – Theme Park – develops, produces, and distributes films Martha Stewart (caterer) – Multimedia company: Cookbooks, lifestyle-products, TV show Redefining Businesses

Concept Roll out Add CD- burning capabilities to 10 Starbucks locations in Seattle With HP assistance have 1000 Hear Music locations by end of 2005 (mix of coffeehouse and retail)

Other Exclusives Artists Choice – Exclusive to Starbucks – Sold 400,000 copies Playing for Change – Launches April 28th – Connect people of the world through music – Benefits (Red) Wire in the fight against AIDS in Africa

2009 Update Slower than expected roll out – Closing stores (600 in US) Expanded offerings – Promotes CDs, DVDs, and Books at almost all locations – Sold 4.4 million CDs in 2007 – “Oprah’s Book Club” feel Conclusion – Increases foot traffic and time spent in stores by customers – diversifies revenue stream

Sources International Herald Tribune Hear Music Trading Markets Playing for Change Smart Brief