Starbucks Finally Realizies That Free WiFi Is The Way To Go

from the took-'em-long-enough dept

Way back in 2003, we explained why fee-based WiFi almost certainly did not make sense for coffee shops like Starbucks. A year later, we had a discussion on how the program could be a lot more successful if it went free. But, for years, Starbucks insisted that the paid WiFi was a success. Except, if you watched, it gradually got more and more “like free.” And that’s because few people were actually using the paid version. And, now, finally, after all of these years, Starbucks is finally going to completely free WiFi. It’s finally admitting that WiFi was always a complementary service to get more people to buy its high margin goods — rather than a product itself.

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Companies: starbucks

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Comments on “Starbucks Finally Realizies That Free WiFi Is The Way To Go”

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35 Comments
interval (profile) says:

Re: Re:

“Their whole mission, basically, was to give people a place to hang out.”

As long as you were buying their coffee, sure. Well, I can see their point. But they sure didn’t engender me the time I sat down at one of their tables with another house’s coffee for a quick rest. Seriously, there were lots of tables empty that day…

interval (profile) says:

Free Wifi

I always wondered why I should be charged to use a wi-fi that, to use, I would have to: Bring a notebook or laptop, know that I would stay at the coffee shop for log enough for it to make sense, and not have my internet-access cell phone with me if I simply wanted to check ‘something’ briefly. It never made sense for me to ever consider using it. Now; if I’m not doing anything at the time, I can make a trip of it and hang out at the coffee shop buying coffee and surfing. Much better option for me.

davebarnes (profile) says:

Let's talk about ROI

First. The investment.
Adding Wi-Fi to a restaurant costs $50/month. Tops.
Second. Return.
Happy customers spend more.
How may customers do you need to spend more to get a great ROI?
Not many.

P.S. I ding restaurants 1 star on Yelp if they lack free Wi-Fi. With AT&T’s caps on data over 3G, free Wi-Fi is muy importante.

Teilo (profile) says:

Re: Let's talk about ROI

“Adding W-Fi to a restaurant costs $50/month. Tops.

Totally not true. A business supplying WiFi to its customers is normally required to get business-class broadband, which costs significantly more than $50 a month. Some of them *may* be using residential class, but they are not supposed to, and it’s only a matter of time before they are forced to go Business class.

Also, Starbucks stores use dedicated T1s. Way more than $50 a month.

Anonymous Coward says:

so lets talk about the dumb question: how much does it cost? $400 for the adapter and $60 a month for a connection? this is a good business model to attract new customers, right?

yet a coffee shop paying a similar amount to play live music to attract customers is bad?

“it’s finally admitting that music was always a complementary service to get more people to buy its high margin goods “

Sinan Unur (profile) says:

Re: Each purchase gets you 30 minutes Wi-Fi

by todd, Jun 14th, 2010 @ 10:20pm

How about each purchase has a serial number. You get 30 minutes for each purchase. As long as you buy things the wifi is free. Seems fair?

Fair‘s got absolutely zilch to do with it. Once the equipment is installed, the marginal cost of an extra unit of Wi-Fi service is zero. Therefore, the optimal hourly price of Wi-Fi in the store is also zero.

Consumers still value it, enabling you to charge more than you would others be able to.

As for music, musicians may want to pay coffee shops for playing their music if coffee shops agree to tell customers whose music is being broadcast.

Teilo (profile) says:

Re: Non-free is a worse deal for SB

Nice theory, but it doesn’t work in real life. I have helped a number of coffee shops setup and maintain wifi, and free wifi invariable means you get certain customers who buy one cup of coffee, and sit there for hours browsing the web. You get more of this when wifi is free, not less.

But it’s the risk you take, and you have to figure out ways to deal with it. You are worse off with no wifi, or no free wifi at all.

mike rice (profile) says:

Starbucks

Starbucks is a joke. Why would anyone pay to stay there when you can buy a bottle of water at a coffee shop without having to pay for wifi. You can bring your own coffee to a wifi library. There are cheaper places to hang out. I’ve never spent any time in a Starbucks except possibly picking up a Wall Street Journal there. I never knew the wifi wasn’t free. I would see people hanging out there. I’ve been at coffee shops where hanging around the people there was the object. None of those coffee shops is a starbucks and in every instance the free wifi, and a single cup of coffee or bottle or water are all that’s necessary for entrance.

btr1701 (profile) says:

McDonalds

This is more a reaction to McDonalds than anything else. With McDs offering a decent line of coffee products and free wifi of its own, Starbucks is no longer the untouchable titan of the coffee world that it once was. It’s seen a significant portion of its business siphoned off by McDonalds’ decent-tasting and much cheaper coffees. Add in that McDonalds wifi is free and Starbucks was pretty much forced to make theirs free as well in order to compete.

MarkDamian (user link) says:

A need for WiFi privacy now more then ever...

What isn’t mentioned in any of Starbucks’ PR materials is that the in-store networks are now even more vulnerable to WiFi sniffing and potential malicious attacks. When you don’t even need a room key to get into the hotel pool anymore, you can imagine all the riff raff that will have access to the Starbucks hot spots. At least with the old “register your Starbucks card”, there was a slight degree of accountability and control over other users on the network. A personal VPN service is the way you can proactively protect your information on any public network (not to keep digging at Starbucks here), and Security Blanket is a perfect example of just such a solution. Shameless plug, I know, but take a look at our site to learn more. We are currently offering a free Beta trial period to users leading up to our full launch this fall. Follow the link to see how you can sign up for the Beta today: http://www.getsecurityblanket.com/learnmore

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