An Analysis Of Starbucks' WiFi Claims
from the where's-the-benefit dept
While Starbucks is making noise about just how “successful” their paid WiFi in stores is going, they don’t give out any actual numbers. Carlo Longino, over at TheFeature, goes through the announcement, makes some reasonable estimates and explains how much more successful the program would be if they gave away WiFi for free. It’s not too hard to do the math and realize that Starbucks isn’t getting that much money for each person subscribing to the WiFi service. They are, however, getting a benefit from those users buying high margin coffee-like products from Starbucks. Put those together, and you realize that free WiFi brings in more users who will buy more high margin coffee, and it completely wipes out any rationale for charging for the WiFi. It’s not clear why no one at Starbucks or T-Mobile has been able to make this calculation.