XM Satellite Radio and Starbucks have gone their separate ways and terminated their partnership as of late last month, as disclosed recently in an SEC filing.
To get out of the agreement, XM handed over $22 million worth of stock. If Starbucks doesn't make the $22 million out of selling the stock, then XM may need to hand over some more shares to make up the difference.
This ends a multi-year partnership between XM and Starbucks, that just never seemed to pay off as expected. Starbucks recently has also been cozying up with Apple, and XM's relationship with the Seattle-based coffee giant seemed to be on the rocks anyway.
"This partnership has been beneficial to both XM and Starbucks in terms of extending outreach as a music and entertainment brand," said XM spokesman Chance Patterson. "We just made a decision to allocate our resources toward other initiatives."
In other words, XM found more value in separating than they did in continuing through with the teetering partnership.
Starbucks XM Cafe (ch 45) will continue to be available for a "limited time" - though it's unknown whether XM will simply rename the channel, or remove it entirely in the aftermath.
[AP]
Thanks to everyone who sent this in!
I hope it just goes back to XM Cafe. I enjoyed both Hear Music and XM Cafe before they combined them, getting rid of them both would be a mistake.
Here's my question...if paying Starbucks $22 Million to go away is considered a great financial move (and it appear to be the consensus, if not unanamous), then what was XM paying annually for this "partnership"?
Just bring back XM Cafe, I like it better back then.
Yes what was XM paying??????
Looks like it was another XM Blunder.
Why did XM have to pay anything is XM that bad that they have to pay to have people listen????
I bet Sirius said you made the deal you get out of it we do not want to deal with it after the merger.
I thought businesses paid to have music not the other way around.
22 Million that is outrageous. I bet even Jacoby thinks it is.
This was just another example of satrad literally throwing money away. At some point in time both Sirius and XM have got to exercise some fiscal responsibility if they are to be a viable long term player.
I have an idea, how about a channel called Music Lab where they play off the wall stuff like Primus and stuff you would never play on FM, it would be great!(hint hint bring it back!)
it's unknown whether XM will simply rename the channel, or remove it entirely in the aftermath.
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My guess is , they'll call it XM Cafe .
Starbucks never seemed to embrace XM -- they should have promoted XM on their cups and in their stores. Didn't happen. How they got 22M in stock to go away boggles the mind.
I'll second LAPTOP GAMER's idea. XM Music Lab is what drew me into becoming a dual sub in the first place.
I like XM Cafe and hope that it stays on the schedule. Good move to get rid of expensive deals, too bad they can't get rid of the "O" deal.
This may have been one of (now former as of this week) Starbucks CEO Jim Donald's last hopes to save his job. Sucker XM into paying out to end their partnership and SBUX makes some cash.
As of this week longitme Starbuckser Chairman Howard Schultz (who previously held the CEO title before Donald's reign started in 2005) took back over as CEO. I'm sure he probably had something to do with it since the company is his baby.
Yes, marketing had some part in the car wreck that was this partnership. They had HP, T-Mobile, and other pamphlets in the store but little to no mention that XM is pumping in the music. XM is better off since they seemed to be the only ones in the relationship to actually promote it.
Starbucks itself is on the downfall thanks to the widespread of McDonald's McCafes, Dunkin' Donuts, more independent and alternative chains, and the big issue, over-population of the concept itself. They don't make smart moves anyways since Starbucks owns their rival Seattle's Best. The company is going to crap.
(correction, Howard Schultz hasn't been CEO since around 2000.)
Please! Please! Please! Don't take away XM Cafe! I love that channel!!!
--The Radio Kid
I hope the station resurfaces. I seem to be one of the few that enjoyed it. It was a great venue to hear new artists I normally would never have heard of or consider listening to. I hope a similar station surfaces.
It also got me to wondering what it is that people get from these things. Do people really draw motivation from this stuff? I have been reading Darren Brown’ s Tricks of the Mind , or at least re- reading sections of it, this week. He points out that motivation is a strange sort of reification. People only talk about motivation in a negative way, he says. They only use the word if motivation is lacking. All that“ being motivated” means is that you are working. It doesn’ t really mean anything, as such. I’ m...