Starbucks Looks to Do Big Box-Office
By George Anderson
Now that Starbucks has conquered the music business, the coffee chain has decided to take on motion pictures.
The company announced yesterday that it had signed a deal with Lions Gate Films to promote its movies and sell soundtrack CDs and DVDs in its shops.
The first film Starbucks will tie into is Akeelah and the Bee scheduled for cinematic release on April 28. The movie is about a girl’s journey to the National Spelling Bee competition. It stars Laurence Fishburne, Angela Bassett and Keke Palmer as Akeelah.
Starbucks’ deal with Lions Gate includes the chain receiving an undisclosed amount of box-office receipts for its role in promoting the film.
“Given the success we’ve experienced with music, this is a logical extension to our entertainment strategy,” said Ken Lombard, president, Starbucks Entertainment. “Our goal is always to bring a sense of discovery to our customers while maintaining and enhancing the trust they have in us. In this case we’re not only offering a powerful means for an independent film company to reach a valuable consumer base and drive theatrical distribution, we are doing so to enhance the Starbucks experience.”
NPD Group restaurant consultant Harry Balzar told MarketWatch: “The most important thing that Starbucks is selling is coffee. Make no mistake about that. But Starbucks was successful in changing the attitudes about coffee in this country. There’s no question the company has the ability to change the way we think about a lot of things.”
Moderator’s Comment: What will tie-ins with films such as “Akeelah and the Bee” do for customers’ experience of Starbucks? Where do you see Starbucks headed
with the entertainment component of its business? –
George Anderson – Moderator
Perhaps I should keep out of this discussion because I freely admit that I do not like Starbucks coffee (shock horror) and rarely if ever make a purchase. Which means that my opinion and understanding of those who do like and use them is probably way off the mark.
However, it has always seemed to me that the high cost of a cuppa includes rent for the freedom to sit there as long as you want to dawdling over a single cup – not to mention subsidising those who do even when you’re getting a takeout – and therefore being sold additional items to swell the company’s coffers could be deemed an intrusion of privacy. People want to pay more for the privilege of being sold to because?
From the film company’s perspective, though, this is a fantastic opportunity. Back in my publishing days, we were always on the lookout for interesting and unusual ways to market our books, doing tie-ins with all sorts of superficially bizarre partners who, in fact, frequently turned out to be fantastic distributors. From the production company’s angle, I wish them luck. From a customer’s angle, I would say leave me to drink my coffee or unwind in peace and cut the high pressure sales act.
Starbucks is taking the 9th step in exploiting their customer base. Their success will depend on how expertly they match their customers needs with what they offer their customers. I don’t think they will have much luck selling the terminator series to their pampered, sensitive, ultra intelligent (their definition) consumer.
This article’s claim that Starbucks has “conquered the music industry” is a bit inflated – flogging CD’s at the counter is a far cry from say, iTunes role in music delivery. At any rate, their core business is coffee and they are bright enough not to let their peripheral business impact that. Personally, they could sell raw fish heads for all I care, so long as it doesn’t impact my cup of coffee in the morning.
(Having said that, here’s a note to Starbucks: Enough Alanis Morisette already. She’s an abomination to the ears at the best of times but hearing her first thing in the morning is just cruel.)
While coffee may be the primary product sold at Starbucks, selling coffee does not define Starbucks as a company. If it did, they wouldn’t have a vice president of entertainment. Finding ways to entice people to come to Starbucks, enjoy the experience while there, to want to spend time there with friends, and to want to come back means the company is creating an experience not just selling coffee. Introducing independent movies to a group of people who may not ordinarily see the movie is similar to the approach used of playing a variety of music in the stores to expose people to music they might not ordinarily hear. What was the result of the music experience? People created CDs including music they had never heard except at Starbucks. Is Starbucks acting as a new form of PBS – exposing the public to entertainment they don’t ordinarily see and hear?
Well, as a dedicated Starbucks customer I’ll give the other perspective. I very much enjoy the coffee, I appreciate my local store staff starts pouring my drink when I walk in the door, and overall consider it a nice way to start my day. I have found that whenever Starbucks is selling something beyond coffee that it complements my life and my Starbucks experience and does not detract from it. I’ve never felt it to be a high pressure sale. I’m the first guy to check out a CD while standing at the counter. Moving into movies is a natural extension of what they’ve done in music. Starbucks will first and foremost be a purveyor of coffee and a retailer of complementary products second. Will they become a major player in the movies? I doubt it and I don’t think they want to. But with the number of customers who visit a Starbucks each and every day, and then look at the demographics of these customers, and it is no wonder that media companies want to work with Starbucks.
This was written from my temporary office at the Starbucks on Bedford Street in Lexington, MA.
Starbucks’ goal of tying coffee, chat and community includes the fusion of multimedia. Besides music and Wi-Fi, it makes perfect sense to leverage their share of eyeballs and share of wallet for media sponsorship. We can expect trailers to be seen on their Wi-Fi and free computers so long as this enhances the Starbucks vision of coffee, chat and community. It would make sense for them to also start offering free VOIP calls using their Wi-Fi areas and other services from the Internet. Anything that can leverage Starbucks’ position and increase their sales of coffee will certainly be examined…the Internet multimedia “fusion” continues.
As long as the entertainment products don’t harm the coffee break experience, Starbucks will do fine, assuming the entertainment items have reasonable margins after the shrink is deducted. It’s good that entertainment items don’t take up much space and they change all the time. So they might help keep the locations a little more interesting. And Starbucks gains by piggybacking on the ad spending by media companies.
True Confession: I have seven thermal Starbucks travel mugs of various shapes and sizes (six stainless steel, one ceramic), an electric Starbucks bean grinder, two Starbucks coffee bean storage containers (one stainless steel, one ceramic), and one Starbucks cup. Each was purchased while waiting for my Mocha Valencia Grande. They keep you waiting, you buy stuff.
It’s a traffic issue. In the grocery business, stores provide shelving to display the marketing efforts of others, and succeed when they can run customers by as many feet of shelving as possible. Starbucks, on the other hand, counts on making shoppers loiter for extended periods of time in front of just a few displays. Supermarkets count on traffic movement, while Starbucks counts on traffic non-movement.