Industry News | September 9, 2004

Starbucks Helps Take Ray Charles to the Top of the Charts

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In an unprecedented shift for music production, marketing and distribution, Starbucks Coffee Company (Nasdaq:SBUX - News) has helped take Genius Loves Company, the final recording from music legend and 12-time GRAMMY® Award-winner Ray Charles, to the number two spot on the Billboard Top 200 charts for the first week of sales in the United States. The CD was a collaboration between Starbucks Hear Music(TM) and Concord Records, Inc.

Starbucks reports that its company-operated locations in North America sold more than 44,000 CDs, which is approximately 22 percent of total album sales. The numbers generated by the company significantly outpace those achieved by other individual record retailers, both traditional and mass-merchants—making Starbucks the number one seller during the CD's first week of sales.

This chart debut for Genius Loves Company supports the proposition that the Starbucks Experience and the Company's broad customer base provide a compelling and powerful new distribution channel. To date, Genius Loves Company has shipped more than one million copies worldwide to Starbucks and other leading retailers.

"Starbucks continues to be thoughtful and strategic as we extend our reach into the music and entertainment arena," says Ken Lombard, president, Starbucks Entertainment. "Our expertise in music through our Hear Music brand, coupled with our unparalleled distribution and consumer reach, created what we hope to be the first of many successful music collaborations. It is truly gratifying to see our customers embracing this fabulous CD and purchasing it in our stores."

As announced late last month, the Genius Loves Company album marks the beginning of a collaboration between Starbucks Hear Music and Concord Records. This collaboration represents a breakthrough model for the music industry, changing how original music recordings are produced, distributed, and marketed to consumers. Starbucks created the album artwork and contributed significant marketing value to the launch of the album, such as playing Genius Loves Company as the featured in-store music selection, and providing an online multimedia experience through the in-store T-Mobile HotSpot Wi-Fi network, reaching millions of customers who frequent the more than 4,000 U.S. Company-operated Starbucks locations each week. The distribution agreement also provides a new and unique revenue source for Starbucks.

"At a time when the promotion and distribution of music is at a crossroads, we are thrilled to have collaborated with Starbucks on all facets of this important album," says Glen Barros, President of Concord Records. "Without a doubt, the ability of Starbucks to connect with their customers is crucial to the success of 'Genius Loves Company' and provides significant growth opportunities for the overall industry."

Genius Loves Company features 12 newly recorded duets with Ray Charles and some of today's most accomplished and respected artists, including Natalie Cole, Elton John, Norah Jones, B.B. King, Gladys Knight, Diana Krall, Michael McDonald, Johnny Mathis, Van Morrison, Willie Nelson, Bonnie Raitt, and James Taylor. Many of these artists, who combined, have won 79 Grammy Awards and sold millions of albums worldwide, were close personal friends of Charles, an original inductee into the Rock and Roll Hall of Fame.

Genius Loves Company is available at Starbucks Company-operated locations and on www.hearmusic.com for $15.95 U.S./$20.95 CAN.