October 21, 2010

Starbuck’s Unleashes New ‘Digital Network’

In the hopes of luring in more customers, Starbucks added free books, news and entertainment to its Internet offerings on Wednesday.

Starbucks, the largest coffeehouse company in the world, promises customers free e-books, movies and other media. The company is also offering free access to some paid websites including The Wall Street Journal, aiming to get customers spending more on drinks and content they buy through the site.

Starbucks has been facing huge competition from McDonald's Corp and other fast-food chains pushing increasingly fancy and popular coffee drinks. The new move offers Starbucks a chance to potentially make extra money selling songs, e-books and other material to customers who linger longer over its free Wi-Fi, which had 30 million log-ins last month.

Starbucks started offering free wireless Internet access in July. The new addition is a partnership with Yahoo.

Customers will see the network as soon as they connect to Starbucks' Internet on their mobile devices. A welcome page allows users to scroll through various sections including entertainment, wellness, business, and a "my neighborhood" section, where they can find community news and other local happenings.

Besides Yahoo, Starbucks is also partnering with Apple's iTunes, The New York Times, Patch, USA Today and Zagat, a restaurant ratings guide. The offerings include advance copies of e-books, through publisher deals, and iTunes downloads.

Most of the free content will only be available for view in Starbucks. The content was designed so it could be consumed in small doses, anywhere from five to 20 minutes. That way, people can either choose to buy the entire content to take with them, or return to Starbucks again. The sites are designed to remember where people leave off in a book or movie, so picking it back up where you leave off is easy.

Starbucks makes money when customers buy content by taking a cut of the sale. The company declined to specify its share.

Adam Brotman, vice president of Starbucks Digital Ventures, said the company worked to get content its customers wouldn't find anywhere else so people have a reason to go to Starbucks for more than just coffee.

Starbucks will offer free iTunes music downloads, which includes a new digital way to download a free song of the week. Previously, customers had to pick up cards in stores. Now, they can log-in, click a few buttons and get the song, which can be played outside of stores.

The network also offers books through the "Bookish Reading Club" and films through SnagFilms. In both cases, the content often is released on the network before its official release. Starbucks plans to add more types of online shopping ventures in the future.


Image 2: View of Starbucks Digital Network content (Photo: Business Wire)


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