XM Satellite Radio Signs Up Starbucks

Robin Arnfield, wireless.newsfactor.com

XM Satellite Radio, the Washington, DC-based satellite radio broadcaster, will provide Starbucks Coffee Company’s “Starbucks Hear Music” channel to its 2 million U.S. subscribers starting this fall. The deal is part of a multi-year, exclusive marketing agreement between the two companies.

Starbucks currently sells about 100 CD compilations, spanning various genres, that it has created under the Hear Music brand at its coffee shops. As part of the XM deal, the “Starbucks Hear Music” channel will feature music from these compilations as well as other sources. Also under the deal, Starbucks will play XM’s “Starbucks Hear Music” programming at 4,000 of its stores beginning in 2005.

Musical Experience

The agreement with XM is part of Starbucks’ policy to bring consumers into its stores by offering them music entertainment while they drink coffee. In March 2004, it announced plans to provide HP Tablets in its stores so that customers could burn their own music CDs.

“We have quite a number of plans for music in our stores,” Starbucks spokesperson Audrey Lincoff told NewsFactor. While unwilling to speculate whether Starbucks might emulate McDonald’s in offering free Internet music downloads to customers, Lincoff did say that one possibility for a later date was to allow customers to download music from the HP Tablets to portable music players.

CD Burning

On March 16th, Starbucks opened what it termed “a Hear Music coffeehouse” in Santa Monica, California. The combined record store and coffeehouse is one of several Hear Music concept stores that Starbucks plans to open under its plan to provide CD-burning technology in its coffeehouses.

“What we have found is that people go into the Hear Music coffeehouse and burn a CD of specially selected tracks for a friend’s birthday,” Lincoff said. “It is a bit like the way people used to create tape selections for their friends.”

The Santa Monica Hear Music Coffeehouse includes 70 HP Tablet PC-based listening stations available in the store, where customers can burn their own disks, taking tracks from a library of 10,000 CDs. The cafe also provides Wi-Fi Internet access.

Starting this fall, Starbucks will start rolling out HP Tablet listening stations to its 2,500 standard Starbucks coffee stores. “We won’t be putting 70 Tablet devices in each store, as there wouldn’t be the space,” Lincoff told NewsFactor.

Plug-and-play Radio

Separately, XM Satellite Radio announced a deal with Audiovox Electronics to market the new Audiovox XR9 plug-and-play satellite radio to its subscribers. The unit can be plugged into a car or into a receiver at home. XM Satellite Radio is available in 80 different 2004 car models.

The XR9, whose expected retail price is US$99.99, is due to ship to retail stores in October. The unit is the smallest satellite radio offered by Audiovox, and comes with a built-in wireless FM modulator so that the user can listen to XM Satellite Radio on any FM radio. It can also display up to 20 customizable stock quotes.