Industry News | August 4, 2004

Starbucks and XM Satellite Radio Strike Deal

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Starbucks and XM Satellite Radio have entered into an exclusive, multi-year, strategic marketing alliance.

As part of the agreement, the "Starbucks Hear Music" channel, featuring music programming from Hear Music, the voice of music at Starbucks, will debut this fall for XM Radio's more than 2.1 million subscribers. Beginning in 2005, millions of Starbucks customers will be able to listen to the "Starbucks Hear Music" channel programming and be exposed to XM in more than 4,000 Starbucks locations nationwide.

According to Hugh Panero, president and CEO of XM Satellite Radio, "XM's presence at Starbucks locations will greatly accelerate awareness of our popular satellite radio service. This is an exciting marketing alliance matching Starbucks, one of the world's best known and respected brands with a huge and loyal customer base, with XM Radio, one of the hottest entertainment products to launch in the last 20 years. The Starbucks customer and the XM customer share similar lifestyles and music passions."

"XM Radio shares our passion for music, which has always been an integral part of the Starbucks music and entertainment experience," said Howard Schultz, Starbucks chairman. "Through the XM 'Starbucks Hear Music' channel, we will continue to build recognition of the Hear Music brand, which is an important building block in growing and extending the music experience at Starbucks."

Earlier this year, Starbucks opened the first Hear Music Coffeehouse in Santa Monica, California, giving customers the opportunity to create personalized CDs in about the time it takes to order a latte. Later this fall, Starbucks also plans to roll-out a CD-burning service to some Starbucks company-operated locations.