starbucks records number one with latte

Starbucks Records: Number One With A Latte

Starbucks seems happy with the sale of the Paul McCartney CD "Memory

Almost Full" and is apparently getting ready to expand its record

label -- Hear Music.

Anyone ought to be excited about selling CDs - even blank ones -

nowadays. Still McCartney couldn't come close to the number of albums

Disney sold to tweens featuring Miley Cyrus as Hannah Montana.

Business for the major record labels sucks that much.

Warner announced more losses this week. I guess more cutbacks are

coming. They'll need to either do that or make more hit records.

Cutbacks are easier.

Warner may lose Madonna. Or it may not.

Madonna is rumored to be negotiating a $100 million Live Nation

concert deal. Or, as a pessimist might say, Madonna is posturing for

her renegotiation with Warner. Can you imagine Warner losing Madonna

with little else to replace her?

One thing seems certain.

No matter what your future model for the record business is - it

probably won't work.

The record business is a business that does not need to exist.

What they do is no longer necessary. The labels may have to get into

another business because selling CDs is becoming like marketing

8-track tapes.

Selling ring tones and concentrating on publishing may keep the wolf

away from the door for a few more years, but really, folks, it's time

for the labels to reinvent themselves or say bye-bye.

What Starbucks is doing is tinkering with the traditional record

business model of selling CDs. Its CEO had been making noises in the

past about putting MP3-type docking stations into stores to allow

coffee drinkers to also fill-up on music. Of course, Starbucks filters

more than its coffee. It decides what type of music makes it into its

stores. They're like Clive. Better yet they're the Juan Valdez of

music. This is very specialized work, but Starbucks seems to know what

its customers want.

As most of you know when a song shows upward progress on the Billboard

charts it earns a "bullet" thus the phrase "Number one with a bullet"

for songs that reach the top of the charts and still have momentum to

stay number one.

Then Starbucks is, well, "Number one with a latte" -- enough momentum

to make selling CDs in the store worthwhile to the coffee trade -- not

necessarily the music business. Kudos to Starbucks for coming up with

a new way to sell CDs, but selling CDs is not the future of the music

industry.

Someday music will efficiently be universally and routinely delivered

over-the-air on some type of mobile device -- not so much in retail

outlets. The consumer will then be able to listen and buy that quickly

and easily.

And I can promise you they won't be paying 99 cents or anything close

to that.

Music may eventually cost what sending a text message costs - and you

know how much money mobile operators make off of text messaging when

it's so affordable to young people.

This ought to be a sign from the music gods to the labels that cheap

music sold in bulk is a good business to be in. But they just can't

give up their dependence on fossil fools - the labels that insist you

buy a CD.

I see live music performance as where the new music business is

heading. There is growth ahead for live performance because you can

only experience it live. A live recording of a concert is a cheap

imitation. Okay, maybe not that cheap, but an imitation nonetheless.

It's one of those vanishing non-Internet dependent businesses like

t-shirts or food. You've got to wear clothes (I think) and we all have

to eat (except Nicole Richie and the Hollywood crowd).

So many in music media are afraid of the future. It must be a human

condition. But the future will be very different and very profitable.

It's just that the people who are in the music related media today

probably will not be in it tomorrow - unless or until they cross over

to the other side.

Bulk is good on more than Barry Bonds. Selling music cheaply and

easily is the future model for the sale and distribution of songs.

Live is better than dead -- more of a future business than

pre-recorded music. Humans still crave live performance even if it's a

live performance of the dead -- The Grateful Dead, for example. You

know what I mean.

And we'll be dead as an industry if our futures don't embrace these

two trends: cheap music sold in bulk (like text messages to teens) and

the potential for unprecedented growth of live music performances.