Starbucks adds home video to retail offerings

LOS ANGELES _ Starbucks' music retail strategy has included an exclusive release from Alanis Morissette, a co-release from Ray Charles and the creation of a record label, Hear Music. Now the coffee giant is hoping customers would like to see music as well as hear it. Beginning Valentine's Day, Starbucks becomes a video retailer.
Its first release is the children's music DVD collection "We Are . . . The Laurie Berkner Band." The project includes a five-song CD and is a co-release from Razor & Tie Entertainment, Two Tomatoes Records and Starbucks Hear Music. It will be available at Starbucks stores in the United States.
Starbucks Entertainment president Ken Lombard says that more than 200 titles featuring a DVD element have been available at the chain's three Hear Music Coffeehouses _ outlets that feature record stores and CD-burning kiosks. Lombard says he felt that the family-oriented nature of the DVD merited widespread availability.
Lombard stopped short of linking the Berkner release to a concentrated, DVD initiative. "Families are an important part of our customer base," he says. "We will look at each project on an individual basis."
Michael Krumper, senior vice president of marketing for Razor & Tie, agrees. "The demographic of people that have bought Laurie Berkner in the past is a group that Starbucks serves," Krumper says. "This was also a way to tap into a new audience for children's music that had not been done before."
The Berkner release features 11 music videos and the bonus CD. The videos should be familiar to viewers of Noggin, Nickelodeon's preschool network. Berkner's CDs have sold 359,000 copies, according to Nielsen SoundScan.
DVDs appear to be becoming more central to Starbucks' entertainment strategies. The company recently announced a large-scale marketing initiative with Lions Gate and 2929 Entertainment to promote the theatrical release of family drama "Akeelah and the Bee." The coffee chain will carry the film's soundtrack and the DVD when it is available later this year.
"We wanted to position our assets in a way that would help address the concern in the industry about declining box-office revenues," Lombard says.
Starbucks will ultimately share in the revenue of the film, its soundtrack and the DVD release. Lombard also notes that Starbucks is searching for the right book to add yet another component to its non-coffee options.
Meanwhile, DVD retailers say they do not feel threatened. "If there's not an exclusive window and things are available to all concerned parties, I don't have a problem with it," says Larry Mansdorf, senior buyer of home entertainment for the Brighton, Mass.-based Newbury Comics chain. "Starbucks is hitting a different customer, one that drinks coffee more than goes into record or DVD stores."