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Brier Dudley's Blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

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June 3, 2008 12:37 PM

Starbucks Wi-Fi: It's not completely free

Posted by Brier Dudley

I'm among the jillions of people who are glad that Starbucks is finally offering "free" wireless access in its stores. As I said before, it's about time.

But you may want to think carefully before rushing in to log on ...

Maybe I'm spoiled living in espressoville, the land of lattes and free Wi-Fi, but the free access that went live at Starbucks today isn't as magnanimous as it sounds.

It's limited to two hours. That actually seems reasonable and like a good way to keep table hogs moving along.

The thing that gives pause is Stabucks' registration system. It requires customers to register with Starbucks to get the service. That means you are trading some personal details and entering yourself into Starbucks' customer files in return for a few hours a day of access.

Starbucks and AT&T aren't going to waste that valuable information. Read the fine print: By registering, you also agree to receive four e-mails (presumably selling stuff, so spam) from AT&T per year. In other words, by accepting the free Wi-Fi, you're opting in to receiving their marketing.

It's refreshing how explicit they are about it, so you can decide if two hours of Wi-Fi is worth four spam a year.

But Starbucks and AT&T are getting even more out of the deal.

As I mentioned in February when the Starbucks Wi-Fi deal with AT&T was first disclosed, Starbucks' genius here is that it's using wireless access to lasso customers and pull them into its online services -- Starbucks.com is acquiring customers for basically no cost, since AT&T's already running the hotspots.

Once that relationship is established, customers are likely to keep coming back to Starbucks. They'll probably be enticed to use other Starbucks services -- credit cards, music downloads and who knows what else in the future.

AT&T also gets the customer files, since you actually create dual accounts when you register for the free Wi-Fi -- one account with Starbucks and one with AT&T.

I'd expect it to pitch products and services on the welcome screen that appears on your desktop when you log in. I wonder if it will also reach out to make offers offline, after you leave the store - Starbucks credit card offers, perhaps?

It's not a huge privacy crisis. You make a similar trade with Google everytime you use its service, giving it opportunity to sell ads to you. But the thing to remember is that the services aren't completely free.

(Not to mention the second loop of the lasso: Starbucks' requirement that you buy $5 a month worth of beverages to keep getting the two-hour blocks of access. ...)

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Posted by LiveCrunch

6:55 PM, Jun 03, 2008

jillions or millions of people?

Posted by Barista Joe

8:45 PM, Jun 03, 2008

As a loyal Starbucks customer and rabid WiFi user, I'm going to take you to task on a couple of items:

1. No where will you find Starbucks referring to this as being 'free'. It's complimentary. LIke the car wash an auto dealer gives you when you buy a car. Or the toothbrush the dentist gives you after a checkup. Nobody complains about that, so why take them to task on it? It's not like the money is going in their pocket - it's a pass-through. And, perhaps if Tully's would have thought of doing similar, maybe they could have been profitable enough to have the IPO they've been dreaming about for so long.

2. I don't agree that this deal will bring in new customers or entice patrons to try new services. It's all about perception: if you already use WiFi at St.Arbucks, this isn't going to change your life. If you don't, it's an added benefit, but you were already there right? And, if I already go someplace else, 2hrs of comped internet time is probably not going to change my cafe preference.

And lastly, is buying $5 every thirty days such a big deal? Really?

Peace

Posted by Bilor Zee

9:47 PM, Jun 03, 2008

Barista Joe's points are well taken, but I've got three coffee houses within a 10 minute drive that offer truly free WiFi that you don't have to sign up for. No strings, no marketing.

Brier's correct that there's no huge privacy crisis here... but to go somewhere else where WiFi is free, unlimited, and effortless, and where the tables are bigger in the first place -- that's a no-brainer. Starbucks has a long way to go here.

Posted by Nathania Johnson

5:12 AM, Jun 04, 2008

I would argue that it's not free b/c inevitably all those Starbucks cards will end up with some money on them.

http://socialmediabutterfly.com/why-starbucks-free-wifi-isnt-really-free

Posted by GoogleFanBoy

6:05 AM, Jun 04, 2008

actually Google is WORSE. With Google you give up privacy on the searches that you do for that session AND EVERY SESSION THEREAFTER. Between their ownership of banner ads (DoubleClick) and publishin ads (AdSense) they can track all of your explorations on the web in ADDITION to search terms.

And yes your search results are different than mine. They track location, time of search, content of search, etc...

And they have 60%+ share in US, 90%+ share in the UK. That should worry you a LOT.

Posted by Brier

2:56 PM, Jun 04, 2008

Thanks for the comments and feedback.

Barista Joe, I'd argue that Starbucks is giving customers the impression that the wireless access is free, even if it doesn't use that exact term. Its descriptions say wireless is "complimentary" which sounds like free. Its tagline at Starbucks.com also says "Wi-Fi is on the house."

If they said coffee was complimentary and on the house, would you assume it was free?

Posted by GLS

10:03 PM, Jun 04, 2008

Why all the strings? I don't get it. They go to all this trouble and expense to offer "free" wi-fi and compete with the independents, but then they put the two-hour limit on it and they want you to register and give up your info. Sorry, not me. I'll stick with my independents. The atmosphere at Starbucks sucks anyway and the coffee is mediocre.

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