The service was installed by the network and IT service provider BT over the past few months in most Starbucks locations. BT has already set up WiFi services in more than 650 coffee houses in Britain and Ireland last year and will also offer the service for Starbucks coffee houses in Spain and Portugal.
“Offering WiFi Thrills Selfish Digital Cheapskates”
Once coffee shops were the retail pioneers of WiFi in order to gain more customers. In 2003 Starbucks and T-Mobile (Telekom Deutschland) offered WiFi at Starbucks coffee houses for a charge of € 7.95 per hours – today that would be rather expensive. But while Starbucks is now launching a free WiFi service in its coffee houses in Germany, other coffee shops are shutting exiting WiFi services down or are introducing official computer-use policies because they believe that WiFi is a profit killer. Earlier this month I read an article of the Los Angeles Times about coffee shops, bars and restaurants in California banning WiFi to make room for customers without laptops. “There is now a market niche for not having WiFi”, one guy is quoted in this article.
In another recent article about free and unlimited WiFi at Starbucks coffee houses in the United States Mike Elgan of Computerworld writes that offering limited free Internet access my be the wrong path. In his opinion this will result in coffee houses filled with laptop campers who jockey for outlet access and use up all the tables while people just buying coffee will not be able to find a place to sit. It would be better to either kill WiFi altogether and thereby free up some tables or to make WiFi free and unlimited, Elgan writes.
“Free WiFi Gives Advantages to Large Companies”
However, Starbucks might succeed with its free WiFi approach because it is a big company. “The ugly truth is that free WiFi gives advantages to large companies over small ones. The larger they are, the more they benefit from free WiFi”, Elgan argues. While small companies offering WiFi often struggle just to provide the service and might be better off simply shutting down their WiFi networks, Starbucks can be a media, marketing and advertising platform because it is massive, ubiquitous and global. “Its scale enables Starbucks to both efficiently provision Wi-Fi and leverage it for profit. Another benefit is that spreading the word about free Wi-Fi and free content encourages customers to visit Starbucks chain stores while traveling”, Elgan writes.
According to Elgan, Starbucks is taking advantage of a change in the economics of coffee shops and monetizing this cultural change: “That change is caused by the digital revolution. People hang out in coffee shops to socialize and read. The way we socialize and the way we read is changing. It happens over the Internet now”. All other coffee shops will only be fine when making really good coffee.
In the United States Starbucks will unveil its in-store digital network this fall with free content from iTunes, “The New York Times”, “USA Today”, “The Wall Street Journal”, Yahoo! and others for customers. For more information on the Starbucks digital network please read the Starbucks press release.
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