Starbucks Cedes Management Of Hear Music Label To Partner; Will Focus On Digital; Lombard Out

This story was written by Staci D. Kramer.
Once again, Starbucks is changing course when it comes to entertainment. The company announced today it is pulling out of direct management of the Hear Music label and instead will emphasize digital strategy and "core" content with music and books digital as Howard Schultz continues to assert his new vision. Managing a music label is not core, so the day-to-day operations will be turned over to partner Concord Music Group. But Starbucks will continue to work with the William Morris Agency "to identify book projects that it can offer in its stores as well as provide strategic counsel on opportunities in the entertainment space." Schultz: " now is the appropriate time to restructure our Entertainment business to better align our efforts with our overall business strategies."

As a result, Ken Lombard, SVP-entertainment, is the latest Starbucks exec to leave. CTO Chris Bruzzo has been promoted to SVP and will add entertainment to his responsibilities.

The release mentions Starbucks' eight Grammys and three #1 NYT bestsellers. It doesn't mention any actual results or that it often looked like all that promotional firepower wasn't delivering matching sales. The label launched with a splashy signing by Paul McCartney, whose album was published to much fanfare including its own Starbucks card. . 

*Apple* & AT&T: "Starbucks will look for ways to enhance the customer experience through the use of wi-fi and other in-store technology." These relationship have yet to be fully mined. Starbucks and Apple (NSDQ: AAPL) did the iTunes giveaway last year to promote in-store downloads, among other things; that has just relaunched as a giveaway. The in-store iTunes digital sales options are sparse, to put it mildly, at least in the stores I've checkedand fairly stale in some cases. (via Starbucks Gossip)


By Staci D. Kramer