Would you like a little Ray Charles with your mocha frappuccino? Perhaps a taste of Alanis Morissette to take the edge off that espresso? Or maybe a shot of Bob Dylan to go with a double tall soy no-foam latte?
They're moving more than just macchiatos at Starbucks. Come Aug. 30, Dylan's Live at the Gaslight, a previously unreleased 1962 live recording, will be available exclusively at the java joints for 18 days. Morissette's Jagged Little Pill Acoustic has just ended a six-week Starbucks-only run during which it sold 170,000 copies.
The Seattle-based coffee merchant, which sold its first Blue Note Records jazz compilation in 1995, is flexing its marketing muscle by providing the very thing that the beleaguered music industry has been so desperate to find: a new outlet where music fans will eagerly spend their money on full-length, full-price CDs.
With Genius Loves Company, the posthumous Ray Charles duets album that won eight Grammys, Starbucks made it clear it has become more powerful than a triple-shot venti cappuccino. Of the 3 million copies sold in the United States, a staggering 775,000 - more than a quarter - were sold in Starbucks stores.
Genius' success gave Starbucks "permission from our customers" to go deeper into the music business, says Ken Lombard, president of Starbucks Entertainment. He says the music industry's problems - sales are down 2.5 percent the first half of this year - make Starbucks an ideal place to reach older, disaffected music fans who don't know what to buy or where to buy it. He says the company's strategy is to move from "a niche player" into "a destination when it comes to discovering new music."
Starbucks isn't hawking only brand-name artists. By playing the artists' music in its 4,400 U.S. stores and on its XM satellite radio "lifestyle" Hear Music channel - "the Voice of Starbucks" - the coffee shop tastemaker is breaking in new ones.
Among them are Antigone Rising, the female folk-rock band that is a Starbucks-exclusive artist, and Amos Lee, the soulful Philadelphia singer-songwriter who has sold more than 26,000 copies - out of 129,000 - of his self-titled debut at Starbucks.
Starbucks has led the way when it comes to selling what corporate types call "branded premium" music CDs. That practice is so prevalent that you can pick up a customized mix disc at Stephen Starr restaurants such as Continental and Buddakan, or prolong the down-home experience at Cracker Barrel by buying its exclusive Alison Krauss album, Home on the Highways, which has sold 125,000 copies.
Genius "was the defining moment when Starbucks became a force to be reckoned with," says Ed Christman, retail editor of Billboard. Starbucks founder Howard Schultz has long understood the value of music in his quest to make Starbucks "the third place" - the informal spot away from "work" and "home" where people gather while getting their caffeine fix.
"Any smart retailer knows that music plays an important part in creating the ambience in their store," says Christman. Victoria's Secret, Urban Outfitters, Anthropologie and Pottery Barn are all in the music business, not to mention world-music label and clothier Putumayo, whose CDs are sold alongside Bruce Springsteen discs at Whole Foods. "It provides cachet," he says.
With Starbucks, music has always been part of the pitch. It got more serious in 1999, when the coffee giant bought retailer Hear Music - which targets the same over-30, upper-income consumers who frequent Starbucks and listen to adult alternative radio stations.
In 2002, the company launched the Artist's Choice series of mix CDs selected by the likes of Sheryl Crow, Yo-Yo Ma and Norah Jones. Some of those, like this year's Elvis Costello collection, which features Louis Armstrong, Aretha Franklin and Rilo Kiley, are excellent.
Now the stores sell as many as 12 titles at a time. The new Coldplay and Dave Matthews albums are on the racks, plus Sly and the Family Stone tribute and greatest-hits albums.
Lombard says the company is "careful to make sure our customers don't feel we've turned their coffee shop into a music store."
But at certain stores - 30 in Austin, Texas, 15 in Seattle, and more on the way - it has set up Hear Music bars where customers can make their own custom CDs. And it is also opening Hear Music record stores with Starbucks coffee shops inside.
The exclusive deals with Morissette and Dylan have peeved music retailers already pinched by digital downloading and by big-box stores such as Best Buy, which deeply discount CDs.
The Starbucks Dylan album is coming out the same day as Dylan's two-disc Bootleg Series, Vol. 7, which will be available in all retail stores. Even so, the exclusive Starbucks Dylan deal "is a slap in the face to grassroots stores," says Pat Feeney, whose Main Street Music in Philadelphia sits across the street from Starbucks. "That's like kicking us when we're down."