The collapse of Starbucks’ plans to become a major player in the film and music industries collapsed yesterday, as the chain jettisoned its top entertainment exec and outsourced its music arm.

Wrote the Times:

As part of the changes, Starbucks said Ken Lombard, president of the entertainment unit since 2004, had departed.

Starbucks also said it would turn over management control of Hear Music, its in-house record label, to its partner in that venture, the Concord Music Group.

Thus endeth one of the silliest ongoing stories in the industry, as each time the company sent out a press release the press swooned: “Starbucks goes Hollywood!” “Starbucks signs Paul McCartney!”

It all started two years ago, when the press was abuzz with talk of Starbucks’ getting into the movie business by cutting a promotional deal with LionsGate for a film called “Akeelah and the Bee.”

The deal was announced on the front page of the Wall Street Journal, and then breathlessly followed up by the New York Times (which credited the Journal with the scoop) and the LA Times (which didn’t) . Wrote the Journal:

For Hollywood, Starbucks represents a potentially lucrative new force at a time when the industry is struggling with a steep downturn in movie attendance and flattening sales for DVDs. With pastimes like videogames stealing customers and consumers turning to the Internet and other new technologies for entertainment content, executives are rethinking how they sell movies. A key part of that effort is finding new real estate in which to grab moviegoers’ attention.

Wrote the LAT:

Lombard said Starbucks wanted to be to movies what talk-show host Oprah Winfrey’s book club was to reading. Though the company says it will not produce films, it plans to pump millions of dollars into films it chooses to promote.

“This is not a test for us,” Lombard said. “This is a firm commitment for us to expand the brand into the movies.

[…]

“They broke the mold when they decided to do music,” said Ron Paul, founder of Technomic Inc., a food market research company. “If bookstores have coffee, then why can’t a coffee store sell books and movies?”

Well, for all sorts of reasons. If you read the stories closely, you could see that the producers of the film were basically just paying the chain to promote its movie; Starbucks was given some undisclosed share of the film’s profits, along with a courtesy “presentation” credit on the film itself.

This was all basically an adult version of a Happy Meal with a Narnia figurine. The twist was that the film was paying the store for the tie-in, rather than the other way around. But even this wasn’t all that different from all of the other non-coffee crap the chain purveys from its stores. Still, Starbucks had a canny PR campaign for the deal, the WSJ bit, and the other papers followed up on the big news.

Now we can see that it was a sketchy plan all along. While Starbucks has obviously shown it can sell music and perhaps even DVDs out of its stores along with little tins of breath mints, the stories today note that the company basically hit a wall at a certain point, as per-store numbers on media sales haven’t risen lately.

The problem with the strategy is that it was predicated on novelty. With movies and CDs, after the novelty  of buying a Starbucks-approved CD wears off, folks will actually start to notice the quality of the music or movies they are being presented with each week or month.

Paul McCartney offering his new record through Starbucks is an interesting fact—for about five minutes. And Starbucks got its little blast of publicity for it.  Joni Mitchell’s doing the same thing is interesting too, but at that point the half-life phenomenon kicks in. What happens next, Elvis Costello? Maybe Van Morrison, and all of a sudden the company is out of pantheonic figures to market and has to go down a tier—to John Cougar Mellencamp, or  Stevie Winwood—and then another: I don’t know, Shawn Colvin, maybe, or Jackson Browne.

Starbucks can sell whatever it wants to in its stores, and for folks who want their music and movies mediated by a fast-food outfit it’s a good match. But as I’ve noted before, when the “how” of the selling of the product becomes the story, it’s a good bet that there’s little else to talk about.