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But spend a little time talking with Starbucks digital ventures vice president Adam Brotman, who'll be speaking at mediabistro.com's Think Mobile conference in San Francisco tomorrow, and your skepticism might start to waver. The coffee chain has noticed that its customers increasingly reach for their mobile devices to cure what Brotman calls "micro-boredom." So if they're looking for entertainment online, why not have Starbucks -- with its long history of curating music, books, and DVDs for patrons -- serve it up to them? And when you find out that the company got rock-star publishers like the Wall Street Journal, Nickelodeon, and Apple to pony up premium content -- for free -- you just might begin to think the coffee giant is on to something. Mediabistro caught up with Brotman to find out about the big breakthrough idea behind the Starbucks Digital Network, whether the network's success is contingent on the rise of paywalls, and what he learned from his famous entrepreneurial uncle.
Many companies are struggling to make online content pay. So what's the big breakthrough idea behind the Starbucks Digital Network?
So how does this all come together?
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 them 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.
|"We win because we're enhancing the customer experience, and we're doing so in a way where everybody's happy to be involved in the transaction."|
So how does that produce the win-win-win you talked about?
We give this great awareness and trial benefit to our content partners. We win because we're enhancing the customer experience, and we're doing so in a way where everybody's happy to be involved in the transaction. Hopefully, most of all our customers.
What's the mobile angle to this?
More of our customers access Wi-Fi in our stores through mobile than they do through laptops. So we designed the site to be a seamless experience across different devices. The design of the site is meant to be easily touched and swiped. It works really well with a mouse, but it works just as well with your fingers on an iPad or iPhone.
Also, the site is a location-based site. It knows what store you're in. So we can do a number of location-based features and engagement points on the Starbucks Digital Network that you normally would associate with a mobile phone. For example, we can work with Zagat to provide full, unrestricted access to their subscriber ratings for restaurants that are right near the store you're in. Or we can work with Rodale -- Men's Health, Women's Health, and Runner's World -- to come up with biking and running routes that start and stop at the very store that you're in. We can even provide weather reports, down the latitude/longitude of the store. And we're doing a lot of community-involvement services, like our work with DonorsChoose.org, where you can fund public school projects that teachers have posted at schools right next to the store.
It seems like you're moving the idea of what constitutes "content" forward as well, developing stuff that can be consumed in brief "interstitial" moments.
I've heard it called "micro-boredom." Particularly at Starbucks. You're in line, or you're waiting for your latte, or you're waiting for a friend to arrive, or you're just drinking your latte and you've got 10 minutes. A lot of time, people will pull out their phone and check email. Maybe they'll want to learn something or discover something because they've got a few minutes. That's happening in our stores a lot.
So will the content be optimized for the person who's just got 90 seconds or 10 minutes, rather than a longer stretch of time?
Sort of. We are designing the content experiences to be "snackable." If it's a free iTunes pick-of-the-week digital download, that is something you can get done in 90 seconds or less. You can check out The Wall Street Journal for free and the New York Times e-edition, which you normally have to subscribe to. Those are very snackable. But if you've got an hour to kill and you were going to be online anyways, we hope that we can provide an interesting alternative to what you were going to do anyways on our free Wi-Fi.
Will people be able to take any of the content with them when they leave?
Some of the offerings will be downloads, like the iTunes pick-of-the-week.
|"'Premium' doesn't have to just mean you have to pay for it. It could be a window of an exclusive."|
Some observers have said the success of the Starbucks Digital Network is contingent on paywalls going up at content sites that are currently free. Is that the case?
No. We don't know what's going to happen in terms of paywalls. We're pretty agnostic to what happens there. There will always be the desire and the ability to create premium content. But "premium" doesn't have to just mean you have to pay for it. It could be a window of an exclusive. For example, right now [with ebooks], you can preview the first chapter or two of a book that is already in print before you buy it. When we work with publishers, we're looking to say, "Let us have a preview before anyone else has a preview." So that makes it premium for our customers. When we work with magazines and other publishers, we might say: "Why don't you create something interesting just for us, by repurposing something that you're doing, or at least give us the first crack digitally, for the first week, where you can only get it via the Starbucks Digital Network, before it goes on to your website."
The Starbucks Digital Network is a curation play, and curation plays depend heavily on the curator. Who's your curator and why do you have faith in them?
It's a curation play, but it's really a customer experience and engagement play. We're not looking at ourselves as some grand arbiter of taste. We're more focused on: What is our brand? What is the customer experience in our stores? And what makes sense for us and our customers around content and engagement?
You joined Starbucks a year and a half ago. What was your mandate?
Be entrepreneurial. Make sure to be innovative in how my group leverages Starbucks assets. Be nimble. Be humble to our customers and our brand.
Why did Starbucks decide they need more entrepreneurialism inside the company?
I have to give a lot of credit to my boss [Starbucks CIO] Stephen Gillett. He and [founder and CEO] Howard [Schultz] and the leadership team came up with the idea that there are certain activities -- particularly in the digital sphere -- that shouldn't ladder up directly to traditional IT or marketing, that are more about engagement and innovation than other marketing activities. They believed that if we set up a group that worked very closely with marketing and public affairs and operations, but was tasked with being innovative and entrepreneurial, and leveraging opportunities with innovative engagement with our customers, that that could hopefully unlock some results that are harder to achieve otherwise.
Your uncle Jeffrey Brotman co-founded CostCo. The customer experience at CostCo is the antithesis of the experience at a place like Starbucks. Did he give you any advice that was transferable from running a large discount chain to operating intimate coffee shops?
The two companies share a passion for understanding what the customer wants and expects. My uncle has always mentored me to focus on the customer and focus on the customer experience. CostCo has always impressed me as a company that understands that the customer wants great product in a no-frills environment. If you boil it down, both companies are equally passionate about what the customer wants -- and about the core competency of the company. And so whether it be at PlayNetwork, or Corbis, or now at Starbucks, that's a lesson that I've always taken to heart.
See Adam's presentation on how Starbucks Digital Network is harnessing content partnerships and location-based services at our Think Mobile conference September 23 in San Francisco.
NEXT >> New Media Toolbox: Must-Have Smartphone Apps
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This interview has been edited for length and clarity. The foregoing is the sole property of WebMediaBrands Inc. The opinions and views expressed in the interviews and/or commentaries are solely those of the participants and are not necessarily the views of WebMediaBrands Inc., its affiliates or subsidiary companies.
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