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The Kings of Lifestyle Marketing
Burning while you wait? Will that be with Skim or Whole Milk?

This is Celia Hirschman with On the Beat for KCRW.

When I walk into a Starbucks coffee house, I-m walking into the most successful and focused brand marketing retailer in America. Starbucks has made the experience of having a simple cup of coffee, into an adult destination site. There are over 4500 Starbucks houses in America, and over a million people visit them daily.

The record business is paying close attention.

Why? Starbucks has made a fortune catering to people, who have distinctive ideas about their coffee, and, about their music. The importance of music at the coffee house giant began in Seattle many years ago. One of the first manager-s of Starbucks made his own jazz compilations for instore play and from that moment, the dye was cast. Customers loved discovering new music with their morning coffee. Over the next few years, Starbucks made a commitment to providing all the houses with interesting gems that escaped widespread commercial radio airplay, and began selling their favorite CDs at the counter.

Back in early 1990-s, an entrepreneur named Don McKinnon built a wonderful CD mail order business, called Hear Music. Much like Starbucks- interest in non-commercial records, the Hear Music catalog offered excellent undiscovered and seminal and CDs, and the catalog was written from a critic-s point of view. It was beloved by record labels. The catalog didn-t stay in business long, but Don invested his profits in retail record stores, and followed the same principles of discovery he had founded in the catalog. In 1999, Starbucks bought Hear Music and incorporated Don-s vision into the Starbucks music equation.

Just this year, Starbucks and Hear Music announced custom compilation services for their 3rd Street Promenade store in Santa Monica. Consumers now can sit down for a cup of coffee and simultaneously, burn their favorite tracks onto new blank CDs, right at the bar.

There are plans to expand that service in October to Starbucks houses in two more cities, and with success, to roll it out to 3,000 Starbucks in the next two years. The CD burning units will be self-serve kiosks. I can only imagine that the next step in this evolution will be to purchase your new digital downloads with your next cup of java.

While Starbucks gets more focused about their brand, Virgin Records, the retailer, seems to be getting less. Walk into the Virgin Records at Union Square in NYC and you-ll find yoga mats, Playboy branded clothing, electric clock radios, zippo lighters and 101 Dalmations toys, next to CD's.

It-s odd, because several years ago, Virgin Records was considered very successful in lifestyle marketing, maintaining a cool atmosphere where adults loved to hang. These days, the Virgin stores feel more ordinary.

Staying hip in the lifestyle marketing game with sophisticated adults is all about being pure to the brand. The minute customers feel you-ve sold out your identity for bigger commercial returns, the sooner they lose faith in your vision.

Record retailers have found that they have few choices ahead, and diversifying what they sell is their best option. As the music business continues to find new sources of distribution, particularly for non commercial audiences, Starbucks offers an excellent, no cost vehicle for airplay and sales. It will be interesting to see how the Starbucks music marriage plays out in the long run.

This is Celia Hirschman with On the Beat for KCRW.

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