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Kiosks Case Study -- music cd mp3 burning in retail

News that Starbucks is evolving its music strategy to "walk into a Starbucks and fill up your MP3 player". Starbucks dropped the CD experiment and instead opened dedicated music section on iTunes. At a talk held jointly by Bloomberg and the Levin Institute, Starbucks' chair Howard Schultz said the beverage giant would soon begin testing and deploying a system that would let its customers add music to their jukeboxes.

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Starbucks has been spinning music offerings for years, though the larger strategy continues to evolve and unfold. The coffee giant is notoriously deliberate and slow-rolling in its initiatives, and company executives are open about an ongoing experimentation process. Several years ago, Starbucks installed a limited number of CD-burning "media bars" in various locations, though it remains unclear if that concept will expand. More recently, the company created a dedicated section with the iTunes Store, though Starbucks has yet to offer a comprehensive iPod solution. Part of the reason is that the Apple player exists within a closed system, a puzzle that has confused digital music strategies at a number of companies.

Now, it appears that Starbucks is attempting to wrestle the portability demon. Just recently, Starbucks chairman Howard Schultz pointed to a system that would allow in-store music downloading to portable MP3 players, though additional details were not offered. "Within 12 months, probably, you're going to be able to walk into a Starbucks and fill up your MP3 player with music," Schultz said. That has stirred speculation of just what the company is planning, and whether an opportunity exists for an iPod competitor like Zune. From a larger perspective, it remains unclear if consumers will want to fill their devices outside of their homes, unless the offered content represents a compelling and easy addition to an existing collection. Meanwhile, a shift towards MP3-based sales by major labels would open iPod access, and propel the Starbucks music strategy considerably.