Chris Pirillo: According to my friend Mike Elgan at ComputerWorld.com, Starbucks will begin providing their customers with free Wi-Fi within the next year. Specifically, Mike sees free wi-fi at McDonalds forcing the issue, and concludes…
| Unsurprisingly, coffee drinks at Starbucks are super profitable. By making Wi-Fi free, Starbucks will be able to counter the lure of free Wi-Fi at McDonald’s and not miss out on the real money — the sale of coffee. |
| Well, that’s my prediction. I’ll report back one year from now — or when Starbucks makes Wi-Fi free, whichever comes first. |
While I’d love to agree, and to stop paying $29/month to T-Mobile for the privilege of connecting at Starbucks and countless airports — something I’ve been doing ever since MobileStar set up the original wi-fi system for the coffee giant — I wouldn’t hold my breath. Two reasons.
First is T-Mobile, which I doubt is eager to give up the income, especially when so many people are glad to pay the price. And note that T-Mobile maintains a remarkably reliable system, which delivers solid T-1 speeds at every location. Nobody does that nearly as well. Caribou Coffee has free wi-fi; but in the locations where I’ve tried it the speed and reliability doesn’t compare with T-Mobile’s.
Second is Starbucks, which I am sure would worry that free wi-fi would cause squatting customers to sink even deeper roots into their chairs. I’ve been told (and it certainly seems credible) that one reason Starbucks plays loud music is to drive wi-fi squatters out of the place. At a Panera Bread near where I live, there is free (and not very good) wi-fi and signs posted urging customers with laptops not to turn the restaurant into personal office space.
(Oh, and I don’t think Starbucks considers McDonalds real competition. Do you?)
Don’t get me wrong. I believe in the future charging for wi-fi will be as retro and unfriendly as charging to use toilets. But that’s not the story in today’s marketplace.
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Just think of all those kids showing up with their iPods hogging the wifi and comfy chairs to play on MySpace.
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I think Computerworld might be right, because of the alliance between Starbucks and ITunes. You are going to be able to download what you hear in Starbucks to your iTunes account. Free wi-fi is almost necessary for that. Besides, Starbucks defines itself as “the third place.” They never encourage you to leave.
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Ideally, to bring people in the door, a coffee place needs to be busy but not too busy. Paying customers who walk in need to be able to get a table. Charging for wireless is one way to tweak fullness, and Dana St. Roasting Co. in Mountain View has another: free wifi but no customer access to AC power.
Another option is to give out access codes to paying customers.
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[…] Doc Searls Weblog · Free the public plumbing Doc Searls on his cynicism about Starbuck’s hypothetical free wifi. He ends up arguing in favor of coworking (whether he knows it or not). (tags: coworking) […]
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[…] Doc Searls Weblog · Free the public plumbing […]
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Good point, Francine. Still, I’d expect the relationship with T-Mobile will make that transition problematic. T-Mobile is fundamentally a phone company, meaning that the look at the world through their billing system, and possess what a CXO at one telco I know calls a “minutes mentality”. It’s hard to imagine any phone company giving away anything they already bill for. I suppose it comes down to who owns the infrastructure and what kind of deals can be made. Whether or not Starbucks owns it (and I suspect they don’t), they could work a new deal where T-Mobile gets the same money but for operating a free service. If T-Mobile doesn’t want that deal, and Starbucks insists on making wi-fi free, they may have to buy the infrastructure from T-Mobile and run it themselves or contract maintenance to some other party.
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I agree, Don, about the need to balance services to optimize the movement of customers through the premises.
In Lexington, Mass, near where I live, there are a Starbucks and a Peets only a few doors away from each other. Both do a steady business. But getting a seat in Starbucks is hard because they’re already occupied, most of the time, by people who won’t be moving soon. Peets, in addition to offering much better coffee service, doesn’t offer wi-fi. And you can usually find a place to sit.
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Starbucks and apple did announce free wifi to iPhone users starting january 2008. Maybe this is a first step for them.
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Another approach to this problem: make net access free, but limit the number of IP addresses in use.
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