Wednesday, July 25, 2007

Paul McCartney signs with Starbucks record label

Paul McCartney, the former Beatle, has decided to sign with Starbucks.

McCartney, who released his most recent album through his longtime record label, Capitol Records of EMI Group, said Wednesday that he would become the first artist to sign with Hear Music, a label being created by the international coffee retailer Starbucks.

The announcement was made Wednesday during the annual meeting of Starbucks shareholders in Seattle. Representatives of the company described the arrangement as a one-album deal with 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 performers and potentially cracking the lock on talent held by major record labels.

Large retailers who attract casual consumers have become particularly attractive to older stars who can no longer expect to receive a lot of exposure through radio play.

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

In contrast with such arrangements, the deal to market McCartney's next album, expected in early June, is not exclusive for the retail chain; Starbucks said the album also would be sold at other outlets. But the deal does signal that another nontraditional company is nudging its way into the music distribution system long dominated by traditional record companies.

"It's a new world now," McCartney said during a video chat with Howard Schultz, the chairman of Starbucks, that was shown at the shareholders' meeting. "People are thinking of new ways to reach the people. For me, that's always been my aim."

McCartney's recent albums have met with mixed results. His 2002 "Back in the U.S." live album, which followed an extensive concert tour and included performances of Beatles hits, has sold 994,000 copies in the United States, according to Nielsen SoundScan data.

For Starbucks, the gamble on 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 it promoted the compact disc heavily in its coffee shops; it went on to sell more than five million copies.

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



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