SCC Blog
Free Music With Your Daily Coffee
October 10th, 2007
I know we typically feature predominately sports business and marketing related stories on our blog, but at the request of many teachers, we will try to integrate more entertainment business and marketing news into our posts. Here is one such example…
Starbucks announced last week that they partnered with Apple in a joint promotional effort. Starbucks purchased 50 million downloads from the iTunes store and will be giving away free song downloads every day through early November. The downloads will be available on a first come, first served basis in stores throughout the country (click here to view the complete story). The complimentary songs were hand picked by Starbucks Entertainment and will include music by notable artists like Bob Dylan, Paul McCartney and John Mayer.
On the surface, this promotion appears to be nothing more than a marketing strategy focused on furthering the development of Starbucks’ iTunes Wi-Fi Music Store. For those unfamiliar with the Wi-Fi Music Store concept, the new Starbucks “Now Playing” service will allow customers to buy whatever song is currently playing in the coffee store instantly via an iPod Touch, iPhone, or laptop…instant gratification taken to a whole new level, compliments of the marketing minds at Apple and Starbucks.
“Getting free access to the iTunes Wi-Fi Music Store and the ‘Now Playing’ service at Starbucks is a great way for customers to discover new music,” said Steve Jobs, Apple’s CEO in a statement. “Imagine walking into a participating Starbucks, hearing a great song, and being able to instantly download it onto your iPod or iPhone. We think this is very cool.” The question, of course, is will consumers agree?
I can’t help but wonder how else Starbucks plans to leverage this promotion. I mean, we’re talking a $50 million investment here… What has to be discouraging is the news that broke yesterday that Starbucks’ stock was down 23 percent in this fiscal year. According to the Seattle Post-Intelligencer, that was the fourth-worst 12-month performance in the Seattle-based coffee company’s storied history, and it occurred during the same time the S&P 500 Index, of which Starbucks is a member, gained 16.5 percent, including dividends. Starbucks is obviously leaning heavily on this promotion to drive consumers to stores.
The other question is will impact Apple and the iTunes store. Will it generate traffic? Will it introduce new users to the iTunes store? Will it encourage a new demographic to consider downloading music as a new means for consuming music?
Either way, I’m curious to see whether this promotion pays dividends (no pun intended) down the road for Starbucks, Apple and stockholders for both companies.
For those who are curious, here is an unofficial list of songs & dates:
*** Questions for Classroom Discussion ***
1) What are demographics?
2) Why are demographics important to sports and entertainment business and marketing professionals?
3) How does the concept of market segmentation relate to this news story?
Chalk Talk
SCC Brochure
10/3 KT Tunstall, One Day
10/4 Joni Mitchell, Night of the Iguana
10/5 Keith Urban, I Told You So
10/6 Emily King, Moon
10/7 Mavis Staples, We Shall Not Be Moved
10/8 Ceu, Roda (Bomba Dub Orchestra Grateful Dub Radio Mix)
10/9 Band of Horses, No One’s Gonna Love You
10/10 Gloria Estefan, 90 Millas
10/11 Fine Frenzy, You Picked Me
10/12 John Legend, Show Me
10/13 John Fogerty, Gunslinger
10/14 Patti Scialfa, Looking for Elvis
10/15 Herbie Hancock, Maiden Voyage
10/16 Angie Stone, Happy Being Me
10/17 Annie Lennox, Dark Road
10/18 Brandi Carlile, Turpentine
10/19 Alice Smith, New Religion
10/20 Rogue Wave, Lake Michigan
10/21 Alice Russell, Hurry On Now (Featuring TM Juke)
10/22 Dave Matthews and Tim Reynolds, Grace is Gone
10/23 Sonya Kitchell, I’m In Love With You
10/24 bitter:sweet, Heaven (Nicola Conte Remix)
10/25 Greyboy w/ Sharon Jones, Got To Be A Love
10/26 Spanish Harlem Orchestra, Sacala Bailar
10/27 Rissi Palmer, Country Girl
10/28 Raul Midon, Pick Somebody Up
10/29 Joss Stone, Tell Me ‘Bout It (Live from the Bowery Ballroom)
10/30 Federico Aubele, Maria Jose
10/31 Sara Bareilles, Love Song
11/1 Hilary McRae, Consider Me Gone
11/2 John Mayer, Dreaming With A Broken Heart
11/3 Galactic, I Got It (What You Need)
11/4 Bebel Gilberto, Um Segundo
11/5 Suzanne Vega, Frank & Ava
11/6 Sia, Day Too Soon
11/7 Paul McCartney, Only Mama Knows