Starbucks Finally Realizies That Free WiFi Is The Way To Go

from the took-'em-long-enough dept

Mon, Jun 14th 2010 6:14pm — Mike Masnick

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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Filed Under: free, wifi
Companies: starbucks

35 Comments

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Robert Ring (profile), 14 Jun 2010 @ 6:23pm

I actually used to work at Starbucks a while back, and it always baffled me why they didn't offer free wi-fi. Their whole mission, basically, was to give people a place to hang out. A place to come and stay and talk/work/drink coffee/etc. Non-free wi-fi directly and actively contradicted that goal.
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ChurchHatesTucker (profile), 14 Jun 2010 @ 6:39pm

Re:
Especially since every other independent coffee shop (which was usually across the street) offered free wifi. You just know some suit was thinking about padding this quarter's revenues.
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Robert Ring (profile), 14 Jun 2010 @ 6:40pm

Re: Re:
Exactly. There were even people that worked with me there that would go to the coffee shop next door after their shift to do schoolwork on their laptops.
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reboog711 (profile), 14 Jun 2010 @ 6:49pm

Based on the slashdot posting about this, it doesn't sound like it went completely free. You just get 2 hours free and then have to pay another charge for another 2 hours.

http://rss.slashdot.org/~r/Slashdot/slashdot/~3/BJu7AQDhC9E/Starbucks-Frees-Wi-Fi

None of this was covered in the wired article, though.
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Anonymous Coward, 14 Jun 2010 @ 7:07pm

Re:
Dude 2 hours in a coffee shop is a long time, especially when they don't have toilets
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umb231, 14 Jun 2010 @ 7:13pm

Re:
I could be wrong, but I think the article you linked seems to be saying the 2 hour thing was what's available now and that it's being changed to "unlimited"... or am I just reading it wrong?
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Robert Ring (profile), 14 Jun 2010 @ 7:16pm

Re:
No, the article you linked to says that currently you only get the first two hours free. That didn't seem to be referring to the upcoming change.
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jupiter (profile), 14 Jun 2010 @ 7:19pm

free?
They probably spend more money each month offering free napkins and straws. Wifi should be free and open everywhere.
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Anonymous Coward, 14 Jun 2010 @ 7:34pm

the starbucks i go to tend to be connected to a barnes and noble, and their wifi was free, so in the end it really didnt matter
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interval (profile), 14 Jun 2010 @ 7:49pm

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.
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interval (profile), 14 Jun 2010 @ 7:53pm

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...
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davebarnes (profile), 14 Jun 2010 @ 8:05pm

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.
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Jay (profile), 14 Jun 2010 @ 8:16pm

Read between the lines
Money folks. Starbucks saw the green and thought that charging more would make them richer.

Let's think about this:

Laptop $400
Wifi Adapter $60 a month

Meeting your dream date over a strawberry frappucino - Priceless
--------------------------------------

Glad Starbucks finally caught on. :)
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Anonymous Coward, 14 Jun 2010 @ 8:24pm

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 "
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Robert Ring (profile), 14 Jun 2010 @ 8:30pm

Re: Re:
Well, I don't really have a dog in the fight, but I'll say that there certainly are some SB locations that are known as not particularly friendly, the good ones (one of which I luckily worked at) would not have cared one bit. Obviously it depends a lot on the manager, though.
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abc gum, 14 Jun 2010 @ 8:50pm

Re:
Playing music attracts customers ... yeah, if it is a bar with live music. But not the crap that is found at the grocery store. I dont know about coffee shops, but one would think people go there for coffee.
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Anonymous Coward, 14 Jun 2010 @ 9:03pm

Re:
Coffee shops playing music creates customers for musicians.

Coffee shops with WiFi creates customers for...the coffee shops.

See the difference, or do you want it spelled out more simply?
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todd, 14 Jun 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?
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Anonymous Coward, 14 Jun 2010 @ 10:42pm

Re: Re:
so why would the coffee shop just make musicians money and not themselves?
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Ash Crill, 14 Jun 2010 @ 10:43pm

Re:
Sure, that would be fair, but then you would be smart to test the ROI on that business model compared to free wi-fi with no strings attached.
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Anonymous Coward, 14 Jun 2010 @ 11:21pm

Re: Re: Re:
Coffee Shops shouldn't pay musicians, because the musicians are already getting money from the exposure. It's a symbiotic relationship.

Coffee Shops should pay for WiFi, because ISPs won't get added customers from free WiFi services.
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Richard (profile), 15 Jun 2010 @ 2:48am

Non-free is a worse deal for SB
Once you've paid for Wifi you're going to make sure you use it = so you'll sit there, occupying space (and not buying coffee) for longer. If it's free the average table occupancy time will be lower - so they get more coffee buying customers.
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reboog711 (profile), 15 Jun 2010 @ 4:25am

Re: Re:
My bad; I think I read it wrong the first time.
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mike rice (profile), 15 Jun 2010 @ 5:13am

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.
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btr1701 (profile), 15 Jun 2010 @ 6:02am

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.
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todd, 15 Jun 2010 @ 7:25am

Re: Re:
A/B testing would certainly be a good idea. The idea though is to discourage non-revenue producing consumers and encouraging revenue producing consumers in a way that won't lose them customers.
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John Doe, 15 Jun 2010 @ 7:28am

Starbucks coffee is horrible...
Ok, I am going to be the first to say it, Starbucks coffee tastes like used motor oil. I don't know why people go there, free WiFi or not.

What does this have to do with the article? Nothing, but I feel better getting that off my chest.
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Sinan Unur (profile), 15 Jun 2010 @ 8:31am

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.
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Sinan Unur (profile), 15 Jun 2010 @ 8:32am

Re: Re: Each purchase gets you 30 minutes Wi-Fi
Consumers still value it, enabling you to charge more than you would others be able to.

That was supposed to be enabling you to charge more than you would otherwise be able to.
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Sinan Unur (profile), 15 Jun 2010 @ 8:37am

Re: Starbucks coffee is horrible...
I find it interesting that you are willing to admit to having tasted used motor oil to be able compare to Starbuck's coffee.
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bull, 15 Jun 2010 @ 1:23pm

Bull crap! They sue people who has open unprotected wifi networks, and let a company to do the very same.

This is like: Dont get free net from this guy, get it from that company! (so we can monitor you!)

And stupid ppl think this is a win... fricking lose!
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Teilo (profile), 16 Jun 2010 @ 3:19pm

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.
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Teilo (profile), 16 Jun 2010 @ 3:25pm

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.
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MarkDamian, 26 Jul 2010 @ 6:29pm

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: www.getsecurityblanket.com/learnmore
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Taylor, 15 Nov 2010 @ 12:01pm

wi fi starbucks
Ya they finally got it at Starbucks. I used to get irritated always getting my passcode just to go online there. I watch Vern Fonk at the coffee shops because he makes me laugh. Some people talk to others and that is fine but wi fi should be free for those of us who just like being on our tech gadgets.
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