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Starbucks WiFi iTunes program goes online in larger markets

The Starbucks Corporation (NASDAQ: SBUX) partnership with Apple Inc. (NASDAQ: AAPL) first announced almost two months ago to bring the iTunes Store into Starbucks locations is now up and running. A San Francisco area writer noted the program's opening in the city's 360 stores last Wednesday. The program offers coffee drinkers the ability browse through the iTunes Store on their WiFi enabled computers, iPhone, or the iPod touch and purchase music tracks.

The biggest feature is the ability to purchase tracks then currently playing in the Starbucks store, but the iTunes connection does not extend to other internet sites, or video and other content in the store. Consumers must still pay for WiFi access to other internet sites in the stores, due to an agreement between Starbucks and T-Mobile. Ken Lombard, the head of Starbucks Entertainment, told Ellen Lee, a San Francisco Chronicle contributor, "we'll never turn our store into a music store" and she notes, "through the Apple partnership customers will have access to any music they like." Unfortunately, if you do not live in the larger markets, you will be waiting until as late as the end of 2009 to see this feature fully operating, as it is extended to the 6,000 U.S. Starbucks locations.

I've commented on this program before, when Starbucks rolled out the iTunes "Song of the Day" that ended last Wednesday, coincidentally. I would argue that in many ways Starbucks is becoming a music store, even if they do not think they are. Maybe not a conventional one, or a large retail chain with a music section, but with the establishment of a record label, Hear Music, and the partnership with iTunes, Starbucks is taking all of the same steps that many music stores have taken in the past. After all, before Tower Records folded last year they had started selling digital tracks. Starbucks is certainly in no position to file for bankruptcy, but the partnership with iTunes makes for a better deal than if a "StarbucksTunes" store had opened.

New Paul McCartney album creates stir for Starbucks

Starbucks Corp. (NASDAQ: SBUX)'s music label Hear Music released Paul McCartney's latest studio album, Memory Almost Full, in the United States today. The chain will host a "global listening party" in its 10,000 stores with an estimated 6 million coffee drinkers poised to hear the album simply by walking into stores in 29 countries. Fans interested in buying the album do not have to go out for coffee though, the album is also available in regular retail outlets as well.

For months, this release has caused a stir in how the music industry works, but in McCartney's England, copies sold at Starbucks stores will not count into the albums placement in album sales charts at the end of the week, BBC reports. Starbucks apparently has no intention of submitting sales data either and Ken Lombard, the executive in charge of Starbucks Entertainment, hopes that the album will sell 5.5 million copies, matching the Ray Charles compilation the company released a few years back.

These 5.5 million copies are not limited to Starbucks locations, but for fans and consumers, buying the album at Starbucks creates a dilemma. At Starbucks, the price is generally the listing price, while retailers like Target Corp. (NYSE: TGT), Wal-Mart Stores (NYSE: WMT), and Best Buy (NYSE: BBY) offer sale prices that are significantly lower than list. Meanwhile, stocks for the coffee company closed at $28.83 yesterday, down from Friday's $29.13. This afternoon prices have fallen slightly lower.

Continue reading New Paul McCartney album creates stir for Starbucks

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Last updated: February 11, 2012: 12:16 PM

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