Filed under: Analysis / Opinion, iPod Family, iTS
Apple and Starbucks, sitting in a tree
The most surprising announcement to come out of this afternoon's press conference was Apple's partnership with Starbucks. The new iPods and WiFi iTunes store were always possibilities. The Starbucks deal was unexpected.My initial reaction was amusement: Well, that's a silly thing! But now I get it. They've turned something that costs Starbucks money into an opportunity for profit.
Consider music videos. Five years ago, there were pricey ads that consumers got for free and generated no income. Yes, you may argue that they influence the sale of albums and concert tickets, but in and of themselves, music videos weren't making money.
Now Apple sells videos in the iTunes store. People pay to watch the advertisements.
Retail chains pay a fee for the music they pipe into their stores. Just like the music videos, Apple has created a profit opportunity for Starbucks (and themselves, of course).
Still think it's silly? Imagine when ten retailers are on board. Or twenty. Or television networks. Grey's Anatomy ends with a description of the week's featured pop tune. Why not grab it then and there?
When this catches on, it will be big.
![TUAW [Cafepress]](http://www.blogsmithmedia.com/www.tuaw.com/media/tuaw-cafepress-promo.png)
Reader Comments (Page 1 of 2)
Fritz Laurel said 5:31PM on 9-05-2007
I think I'll wait a few months and see if the price drops 33%.....
Cheers,
FL
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Timothy Idol said 5:32PM on 9-05-2007
Well... In my unprofessional opinion, almost every thing from todays event was right out of the Microsoft playbook. It's a sad sad day, when I tell the world that Apple does not deserve your money. It's a sad day indeed.
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Matthew said 5:34PM on 9-05-2007
The whole Starbucks/T-Mobile HotSpot thing has me curious as it relates to this announcement. Very weird mix of companies at work here.
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artifex said 5:37PM on 9-05-2007
yep, music matters so much to me that I have to have it right away if I hear it, and I have to carry tons of it around, and I have to watch it too, and...
The whole things is starting to sound like these industries are built around addictions they are fostering. I mean, I do like music and movies, but they're not the focus of my lifestyle. I barely like coffee, though, too, so ignore me.
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Absent One said 5:38PM on 9-05-2007
Whats next a built-in homing mechanism for locating selected retail partners like Wal-Mart, Home Depot, Sears, McDonald's and Pottery Barn stores. Whenever the user is in a three mile radius of these retail outlets, a pop-up map will be available that will guide the user to the stores to which they are near.
I can see it now - Next announcement event -
"Says Jobs, 'We absolutely love outlandishly large retailers that wipe their feet on the global population, the environment and small, local businesses. We can't partner up with these megaliths fast enough!'"
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cms said 5:39PM on 9-05-2007
C'mon - the most surprising announcement was the $200 price drop for a product that has been in the market for 68 days. I'm not really complaining because I know there is always an early-adopter tax (in this case, a big one)... but the Starbucks deal pales in comparison. Not in the long term, I grant you, but it's certainly the news for at least the next 68 days.
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artifex said 5:43PM on 9-05-2007
Oh, and I wonder how long before someone hacks the system to NOT show the Starbucks button. It reminds me of Tivo adding ads.
I also think, if they're going to use this technology to serve Starbucks ads, they could at least also cross-ref the store # that is serving to tell you roughly where you are in Google Maps, since there is STILL NO GPS. So make that be hack #2.
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Jeremiah said 5:49PM on 9-05-2007
Actually, I can tell you why this is big news...
Many advertisers and retailers have been looking at this "iPod Revolution" and trying to figure out how to make money off of it.
Now, there's the platform to do it and create multiple revenue channels for Apple. The iPhone is finally realizing the dreams of various test devices from years ago.
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djfred said 6:13PM on 9-05-2007
Looks to me like a prelude to being able to pay for things wirelessly with your iPhone. They do it in Europe and Japan already, so it's not new technology but new to the US. It looks like Apple's throwing down the gauntlet to other celll phone makers that when it does happen here, it's going to be on an iPhone.
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Angela said 6:41PM on 9-05-2007
Starbucks charges for their wireless, unlike nearly every other business in our area. Which is why I rarely go there, but frequent the mom and pop's who know that nickle-and-diming-people to death isn't the way to do business.
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Brad Adams said 6:49PM on 9-05-2007
When this catches on, it will be big."Let's hope it doesn't catch on
then. Sure it's a great way for advertises and Apple to make money,
but that doesn't mean I want a ton of advert buttons on my gadgets.
Plus, the first thing I'll do is start looking/developing for a hack
to get rid of them!Maybe it's just me, but Apple doesn't have a clue
if they think I'd ever use this.
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Andrew Hamilton said 8:00PM on 9-05-2007
I am hearing more and more that todays conference has revealed a "new" commercial mass marketing approach by Apple. I used to like them when they were pirates...now it appears that they are moving in the direction of Microsofty. I can't see myself needing to download a song in the instant I think of it in Starbucks. I can appreciate wifi though. And, I can appreciate the price drop of the iphone. Thats just neat.
Andrew Hamilton
Video Production Las Vegas
Hamilton International Productions
http://www.hiproductions.com
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Matthew E said 8:19PM on 9-05-2007
@11 Amen.
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dalasv said 4:47AM on 9-06-2007
Exactly, this is why I think this was actually the biggest announcement at the press conference, even though it kind of came in below the radar. This is the beginning of a huge shift.
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phil said 9:00AM on 9-06-2007
Even if you don't end up buying the tune, I can see it being a nice feature to be listening to a new song and like it enough to want to know who the artist is. Now imagine if the technology moves beyond just Starbucks stores, and you can id the song playing in any major establishment and buy it if you like it. That kind of instant feedback / sync is a major paradigm shift in music marketing. It's a little thing now, but could be the start of a whole new way of acquiring (and marketing) music.
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Galley said 10:27AM on 9-06-2007
Starbucks currently charges for Wi-Fi? I'm glad I don't drink coffee.
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Sulayman said 1:08PM on 9-06-2007
So they only mentioned the music store. Does that mean the Wifi is not free for other uses, like web browsing?
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HughC said 2:59PM on 9-06-2007
For the benefit of readers, I've developed a new logo.
http://www.intercuts.com/weblog/2007/09/starple-or-appbucks.html
By the way, wordsmith's anagram server produces "paperback sluts" when you stick in Apple and Starbucks. Selling books next?
HC
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max Walker said 4:23PM on 9-06-2007
5800 new stores for iTunes and Starbucks are picking up the tab. Supports impulse buying and those without wifi at home. Cool
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Michael Schmitt said 11:04PM on 9-06-2007
I was just watching the "You'll never know what part of the internet you'll need" iPhone commercial and saw the "stocks part of the internet on your iPhone" part; I now see why SBUX was part of the stocks part of the commercial with their synergistic approach to the coffehouse experience and the internet. I also see that HD, ADBE, NKE, GOOG, and EBAY are ticker symbols on there. ADBE sells products that help Apple (Photoshop, etc.), NKE has iPod integration, and GOOG is part of the package when it comes to iPhone's internet integration. How do HD and EBAY fit into Apple's current "synergistic" plans out there?
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