Hear Music, the joint record label venture between Starbucks (NASDAQ: SBUX) and Concord Music Group, has signed its first "developing artist" in Hilary McRae, reports Billboard. McRae's first album for the label is not due until next spring, but her song "Consider Me Gone" is the Starbucks Song of the Day for November 1. Billboard also notes that Hear Music plans to "release records by eight artists in the next year, but all of the signings remain under wraps for the time being."

McRae is the first "new" artist to join Hear Music's repertoire, following in the wake of legendary musicians like Paul McCartney, Joni Mitchell, and James Taylor. It will be interesting to see how Starbucks and Hear Music market an unknown artist, one without the years of popularity and large fan base that the label's signings to date bring with them. Assuming the Song of the Day program is successful, Starbucks will at least get McRae's name to coffee drinkers. Unfortunately, that's where the comfort of a well-known artist's career comes in handy.

Hear Music has had a very successful first year, starting in June with the company's first release, Paul McCartney's Memory Almost Full, which went to #3 in the Billboard 200 and sold 161,000 copies in its first week. In September, Joni Mitchell's Shine debuted at #14 in the same chart -- not bad either. Both of those albums featured heavy promotion and were played all day long in Starbucks stores. There is no doubt that McRae's first album will enjoy the same treatment when it is released, but for Hear Music, this is more than just artist development.

I don't like Starbucks Corporation (NASDAQ:SBUX). I've been to Starbucks stores several times with friends who insist on meeting there, but I've actually never bought anything there -- probably, at least in part, because I don't drink coffee. I also don't like the atmosphere. To me, there's something phony about an international chain that tries to cultivate this local cafe feel, complete with paintings by local artists on the walls. Then there's the fact that they sell Norah Jones CDs and other yuppie paraphernalia. Color me cynical, but I really just don't like Starbucks.

The company is now starting its own record label as an outgrowth of its Hear Music brand. The record company, a partnership with the renowned jazz label Concord Music Group, will feature jazz music. The company is not saying whether it has signed any artists yet, though the label is expected to focus on a mix of new and established artists.

While this may seem like a case of unnecessary diversification, I like the idea of a Starbucks record label. While it will probably remain a small enough portion of the company that it not to impact earnings in a meaningful way, Starbucks stores provide an inexpensive way for the company to market new artists. With vocalists in the jazz and classic pop style like Norah Jones and Diana Krall finding success, I wouldn't be surprised if the next popular songbird of jazz comes from the Starbucks label.

In a move that shouldn't have surprised anyone, the music industry rejected Apple Inc.'s (Nasdaq:APPL) Chief Executive Steve Jobs' suggestion that they remove anti-piracy technology from recordings.

Mitch Bainwol, chairman and chief executive of the Recording Industry Association of America, instead urged Apple to open up its proprietary digital rights management software so that users can play songs bought on iTunes on other devices, according to the Associated Press. That's the same idea being pushed by some governments in Europe.

Both sides claim that they are worried about security. Apple has said opening its technology up would enable hackers to figure out how to thwart it. The record labels have been worried about piracy over the Internet for years. What both sides are really concerned about is the bottom line.

Apple is coming under increasing pressure from some governments to allow people who don't own iPods to be able to download songs from iTunes. The company doesn't want to be forced to be magnanimous and lose any of its considerable advantage it enjoys in the marketplace against upstarts such as Microsoft Corp.'s (Nasdaq:MSFT) Zune.

The record companies continue to struggle even with the boost in digital music spurred by Apple. Data from the RIAA shows that the total value of music shipped during the first six months of the year fell 6.1 percent to $4.9 billion. Shipments of physical units fell 15.7 percent while digital revenue soared 86.6 percent and ringtones grew by 97.5 percent.

So, it's in the interest of both sides to find a way to work out their differences. Apple and the music industry have always had a love-hate relationship. They at least need to create a situation where they can tolerate one another while muttering insults under their breath,