Starbucks Won’t Hear Music

Starbucks announced April 24th that it has turned over day-to-day management of its Hear Music label to joint venture partner Concord Music Group in order to focus on its core coffee business. Starbucks also announced entertainment division president Ken Lombard was leaving the company.

"As part of our ongoing transformation, we are committed to examining all aspects of our business that are not directly related to our core," Chairman Howard Schultz said in a statement.

Less than a week later, the company announced its second quarter profit plummeted by 28 percent from same period in 2007, despite efforts to improve customer service and barrista training at its coffeehouses.

"We continue to come under very heavy consumer pressure due to the economy," Schultz said of the dropoff.

The Hear Now label’s first and biggest success, Ray Charles’ Grammy-winning 2004 album Genius Loves Company, hasn’t been duplicated, though CD marketing has been relatively successful. However, films like "Akeelah and the Bee" and "Arctic Tale" have been commercial disappointments despite critical praise.

Starbucks said it would continue working with William Morris Agency to find books that it could offer in its stores.

The company said Lombard was leaving "to pursue other business interests." He was replaced by Chris Bruzzo, Starbucks’ chief technology officer, as head of the music, books and film division, according to the Los Angeles Times.