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McCartney Signs With Starbucks for His Next Album

March 22, 2007
By Jeff Leads
New York Times

Paul McCartney has decided to come together with Starbucks.

Mr. McCartney, who became a free agent after releasing his most recent pop album through his longtime label, EMI Group’s Capitol Records, said yesterday that he would become the first artist to sign with Hear Music, a label being created by Starbucks.

The coffee chain has previously sold albums from artists like Ray Charles and Sergio Mendes.

The announcement was made yesterday during Starbucks’s annual meeting in Seattle. Representatives for the chain described the arrangement as a one-album deal with Mr. McCartney retaining ownership of the master recording.

The arrangement is the latest sign of how retailers are seizing opportunities to set up direct relationships with musical artists — and potentially cracking the major record labels’ longtime lock on talent.

Mass retailers who attract casual consumers have become particularly attractive to older stars who can no longer expect to receive exposure through heavy radio play.

Wal-Mart, which struck a deal two years ago to become the exclusive seller of music from the country music superstar Garth Brooks, recently worked out an arrangement to be the sole retailer of the next Eagles album for one year.

Last month, Target started selling a 15-disc series that includes new recordings from Kenny Loggins and David Cassidy.

In contrast to those other arrangements, the deal for Mr. McCartney’s next album, expected in early June, does not restrict it to just one retail chain; Starbucks said the album would be sold at other outlets.

Still, the deal does signal that another nontraditional company is nudging its way into the music distribution system that has long been dominated by traditional record corporations.

“It’s a new world now,” Mr. McCartney, the former Beatle, said yesterday during a video chat with Howard Schultz, Starbucks’s chairman, conducted in front of thousands of people attending the shareholders’ meeting. “People are thinking of new ways to reach the people. For me, that’s always been my aim.”

Mr. McCartney’s deal comes at a time when his music has been meeting with mixed results. His 2002 “Back in the U.S.” live album, which followed an extensive concert tour and included performances of the Beatles’ hits, has sold 994,000 copies domestically, according to Nielsen SoundScan data.

His last album of new pop songs in 2005, “Chaos and Creation in the Backyard,” sold about 533,000 copies.

Starbucks executives suggested they could do better by capitalizing on the coffee chain’s audience of loyal latte drinkers.

Glen Barros, who is chief executive of the Concord Music Group, which is a partner in the Starbucks label, said that one of the mainstream music industry’s troubles “is that even when a superstar like Paul McCartney puts a record out there is a very large percentage of his potential audience that doesn’t even know the record came out.”

“Much of that audience,” Mr. Barros said, “will be walking through Starbucks stores on a daily basis.”

For Starbucks, the gamble on Mr. McCartney represents a sort of return to its earliest — and most successful — strategy: marketing new music from a familiar name. (Starbucks helped produce the Ray Charles album “Genius Loves Company” and promoted the CD heavily in its coffee shops; it went on to sell more than five million copies.)

Music executives and rival retailers say the chain has had far less success in selling unknown artists, and in its experiments with kiosks that let customers burn their own custom CD’s.

Nonetheless, they said the company’s latest accord represented a step forward in its effort to cast itself as a tastemaker. Others noted that as more conventional retailers, like Tower Records, die off amid the industry’s prolonged sales slide, the role of more specialized chains in reaching music fans will increase.

“You’re targeting them where they are,” said Jim Brandmeier, chief executive of 180 Music, a label and marketing company that developed Target’s exclusive series. “The nontraditional approach is fast becoming the only way to do it.”