Prediction: Starbucks Wi-Fi will soon be free?
At many of the Starbucks here in Manhattan, there is often a fierce, albeit unspoken battle for a table near an outlet. It’s almost as bad as when people in the gym look over your shoulder to ensure you’re not on the Precor or treadmill for more than the 30 minute time limit. We’ve all walked into a Starbucks and witnessed the seemingly dozens of people tethered by their earphones to their laptops, which are recharging for free in one of the already too-few electric outlets hidden on an often-inconvenient wall. And count me as one of the guilty. I’ll pack my MacBook Pro and the extra-long power cord into my beloved Tumi backpack and head for a Starbucks several days a week, taking advantage of the free electricity and fifty-four cent decaf coffee refills, after my Grande drip (Caffe Verona when possible,) while I connect to the Internet via my $30 a month T-Mobile broadband Wi-Fi account. But, you know the first thing we do if it’s not a regular Starbucks we often visit, we scan to determine the electrical outlets to tables ratio. And if you’re like me, you know where all the outlets are, what time the Mommy crowd shows up, which Starbucks doesn’t have blinds, so come in before 3 PM or after 4 PM. It is something of an art.Well, good news/bad news: Mike Elgan, veteran tech editor, guru, and long-time blogger, predicts Starbucks Wi-Fi will soon be free, soon, as in, within a year.
The good news? You and I will save $30 a month. The bad news? So will everyone else. Everyone else in Manhattan with a laptop that they will suddenly start toting around with them, as they compound the table-availability problem even further. Charging $30 a month for Wi-Fi somewhat limits the number of people willing to use it. And while I believe that “all men are created equal, that they are endowed by their Creator with certain inalienable Rights. . .”, one of which is access to the Internet, like life, liberty, and the pursuit of happiness, no one ever said inalienable Rights come free.
Free Wi-Fi, as a democratization tool, has not fared especially well. But this does bring up lots of interesting questions, like, will Starbucks install even more electric outlets for even more customers’ laptops? Will they even think to put a time-limit on table occupation? Do they have an exit strategy? (Oh, wait, wrong occupation issue.) As I commented earlier on The Raw Feed, Mike’s excellent blog,
“[t]hey will get even more people buying one grande drip, getting the 50 cent refill, taking up space for hours, to the detriment of a more affluent customer who has no hesitation spending the $30 a month for T-Mobile Wi-Fi access, and, presumably, the $5 for a Pumpkin Spiced Latte.”
Offering free Wi-Fi will only make it worse for the dedicated customer, and, I would think, for Starbucks. Part of the answer to Starbucks’ question of free Wi-Fi has to lie in their partnership agreement with T-Mobile. T-Mobile had a rather lucrative contract to design and install Starbucks’ W-Fi network. How long was the contract? Who owns the hardware? If Starbucks can break their contract with T-Mobile, is there a penalty fee Starbucks would have to pay? Would they still contract with T-Mobile as the broadband provider? Starbucks uses the same Wi-Fi in their stores to link to their corporate offices, so, would that be impacted? What are the terms of customer capture (customers who sign up and pay for the service)? Does Starbucks make money from those annual contracts? And, they most obvious question, what does free Wi-Fi for us cost Starbucks and their shareholders? Because I doubt the extra revenue to pay for this will come from oil. (Damn, another bad Iraq analogy.)
If Starbucks goes to the free Wi-Fi model, would they find a way to make up for the lost subscriptions? Would they be able to recoup some lost revenue through advertising? They might get more traffic, but will have greater challenges in turning over tables, which would mean mean more people not buying, for lack of a place to sit. Even more folks will just hang there all day. But you know I’ll be one of them. Now, if we could just get Starbucks to clean their restrooms more regularly…
My all-time favorite Starbucks in Manhattan? The Starbucks on Park Avenue and 48th Street. Great customers, some very attractive, dressed very well, smart and appropriately friendly. And entire big desk table, with room for six laptops and a ton of outlets. Tons of tables, and even more outlets. The staff is nice, and the restrooms are not too bad.
Where is your favorite Starbucks?
Tags: 10017, Internet, Manhattan, Mike Elgan, Starbucks, T-Mobile, The Constitution, The Matrix, Wi-Fi




