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Some U2 With Your Brew?

Starbucks Plans to Get into the Digital Download Business

February 10, 2006

Starbucks • Starbucks Tries a Downscale Approach • Economy Sour, Starbucks to Close More Stores • Starbucks to Close 600 U.S. Stores • Baristas Beware: Starbucks Puts Machines in 86 Stores • Starbucks Serves Up Free Wi-Fi • Starbucks Cuts Trans Fats • Starbucks Data Loss No Laughing Matter • Starbuck Raising Coffee Prices • Starbucks Sales Losing Steam • Starbucks Plans to Get into the Digital Download Business • Starbucks Pours on the Trans Fats • Starbucks Raising Prices • Starbucks Blends Brews and Blues --- • Consumer Complaints

You might think of Starbucks as selling coffee but Starbucks thinks of itself as selling a lot more than coffee. The way Chairman Howard Schultz sees it, "Starbucks is a network."

Schultz told shareholders at the company's annual meeting that, while CD sales are good, Starbucks digital downloads are the future.

Starbucks already has the biggest Wi-Fi hotspot footprint in the U.S. and Schultz sees a Starbucks download service as one way to more effectively leverage its Wi-Fi assets.

"We understand the cultural relevancy of digital fill-up. I can’t say when, but it’s in our future," Schultz told shareholders who'd earlier been crooned to by Tony Bennett, who's working on two CD projects for Starbucks.

Schultz said the company may partner with entertainment or Internet providers to create a proprietary content network.

Schultz isn't forgetting the bricks-and-mortar-and-latte side of the business. He wants to expand to 30,000 stores worldwide, with much of the new growth in China.

He told reporters he hopes to make China the second-largest market behind North America. The company currently has about 400 stores in China.

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