Starbucks Brewing Hits

The long island all-female band Antigone Rising had just performed three songs for Starbucks executives at their record label's New York offices. The Starbucks team huddled briefly, then offered to release an Antigone Rising CD exclusively at the coffee chain, which serves 33 million customers a week. It was a huge break for a hard-rock band that has sold just 20,000 albums on its own. But before signing, singer Kristen Henderson had a question for the Starbucks execs. "I asked, If they were at a Starbucks, would they know how to go behind the counter and make the coffee themselves?" she says. "They said they would. That was reason enough. I liked these guys. It was really important to us that it was, like, a grass-roots mentality."

Starbucks, which jumped into the music business last year, selling 700,000 copies of Ray Charles' multiplatinum, Grammy-winning swan song, Genius Loves Company, has the rare corporate ability to seem small and grass-roots while earning $5.6 billion in yearly revenue. With CD sales slumping in the last four years and record stores losing customers to file-sharing and video games, Starbucks is an unusual retail success story. It sold 65,000 copies of Tina Turner's All the Best, helping it debut at Number Two on the charts; installed burn-your-own-CD "media bars" at forty-five stores; put out a Joni Mitchell collection with the reclusive singer-songwriter's cooperation; and plans a new release by jazzman Herbie Hancock this fall.

The biggest project may be yet to come. Although Starbucks officials won't comment on upcoming releases, sources say Bob Dylan and Sony Music are in talks with the chain to exclusively put out The Gaslight Tapes, a series of 1962 solo shows at New York's Gaslight Cafe that collectors and bootleggers have cherished for decades.

Antigone Rising, who will release a Starbucks-only unplugged album on May 11th, before the electric version is due in record stores next fall, is the chain's first attempt at breaking a new, largely unheard artist. "When we talk to adult consumers, they say, 'It's difficult for me to find out about new music, and when I do hear about a new record I'm interested in, I find it difficult to get,'" says Don MacKinnon, vice president of music and entertainment for Starbucks, who co-founded a national mail-order catalog, Hear Music, and sold it to Starbucks in 1999 for $8 million. "This is about building trust in that consumer and delivering conveniently."

For Antigone Rising's Henderson, Starbucks is a great marketing opportunity in a world where The O.C., TV commercials and Internet downloads can break artists almost as well as radio and MTV. "Our records will be front and center," she says. "We couldn't find the negative."