This summer, Starbucks announced that, later this fall, it will launch an in-store digital content network that customers can peruse using their laptops, smartphones, iPads, or just about any other mobile device they have on their persons as they order lattes and sip frappucinos. Starbucks’ vice president for digital ventures Adam Brotman will talk in depth about the project at mediabistro’s Think Mobile conference in San Francisco this Thursday. Ahead of the conference, we caught up with Brotman to learn why Starbucks thinks it can make content pay and whether the network’s success depends on the emergence of paywalls at other content sites. Our full interview appears tomorrow as part of mediabistro.com’s So What Do You Do series.
In the meantime, here’s a brief glimpse into how Starbucks persuaded premium content publishers – like the Wall Street Journal, the New York Times, USA Today, Nickelodeon, Rodale, Zagat, AOL’s Patch, and Yahoo – to provide content to the Starbucks Digital Network – for free, no less. Brotman explains:
We went to the various content companies that we wanted to hand-select for our customers, based on a lot of talking to our customers and based on the kinds of content they’d be interested in. And instead of charging [those companies] for access to our customers – and many of them would love to have access to our customers – we said: “Why don’t you provide something of value that they can’t get for free on the Internet, or that they can’t get at all because you make it a ‘sneak peek’ or exclusive to us.” That differentiates the content for our customers, but it still gives these content partners [the ability to raise] awareness [among Starbucks customers] and [have those customers give their content a] trial within our stores. Then we share revenue on the upsell, so we become like an affiliate network.