I finally watched the Apple special event in its entirety. I actually watched a few segments a number of times. I was impressed by the vision of the founder of Starbucks for that company’s emerging music sales model. I’m not a big fan of Starbucks and rarely visit the stores unless time or location offer fewer options.

I was impressed by the statements concerning the average number of repeat store visits per month by regular customers. Obviously the chain has a very loyal regular customer base.

Music can be a very lucrative business and both well known companies (Apple and SBUX) are teaming for a long-term venture in non-traditional digital music distribution. Are there real investor opportunities in the hook up of the two firms?

This was one of the more exciting aspects of the iPod event. I’m surprised that few have really picked up on what this means. Apple and Starbucks are effectively providing a comfortable replacement for record shops as music moves from physical to digital media.

It can only serve to benefit both companies.

Any possible tie-ups with McDonalds?

[quote author=“wheeles”]This was one of the more exciting aspects of the iPod event. I’m surprised that few have really picked up on what this means. Apple and Starbucks are effectively providing a comfortable replacement for record shops as music moves from physical to digital media.

And in a bid to appeal to cappuccino culture , HMV in the UK announced they’re installing coffee shops, internet cafйs (exclusively deploying iMacs!) and download stations in their stores. Plus зa change…

SBUX is trading close to its 52-week low. I may reposition to pick up a couple round lots.

[quote author=“Mace”]Any possible tie-ups with McDonalds?

Starbucks is more of a fashionable style chain. I think that Starbucks customers are more aware of fashion tendencies including cool techno-gadgets, and Apple in on the lead, or at least more prone to spend more money on them. I don’t see people going to McDonalds as the same kind. I mean, they are mostly very young people so their buying power is probably lower. McDonald’s customers are the ones wearing Shuffles, but they will probably get harder to buy an iPod touch or an iPhone capable to download songs on that places. I hope I’m wrong though.

[quote author=“carbonat”][quote author=“Mace”]Any possible tie-ups with McDonalds?

Starbucks is more of a fashionable style chain. I think that Starbucks customers are more aware of fashion tendencies including cool techno-gadgets, and Apple in on the lead, or at least more prone to spend more money on them. I don’t see people going to McDonalds as the same kind. I mean, they are mostly very young people so their buying power is probably lower. McDonald’s customers are the ones wearing Shuffles, but they will probably get harder to buy an iPod touch or an iPhone capable to download songs on that places. I hope I’m wrong though.

There are several shuffles in my home and I haven’t walked into a McDonalds in years. I don’t see the shuffle as a “budget” product. It’s a convenience item at an attractive price.

To start, I doubt the burger chain is interested in providing Wi-Fi in its thousands of restaurants at this time. I don’t think the chain is all that interested in selling music with fries.

Marketing to Starbucks customers is more highly targeted and the two firms are looking to increase yields through music distribution.

[quote author=“DawnTreader”]To start, I doubt the burger chain is interested in providing Wi-Fi in its thousands of restaurants at this time. I don’t think the chain is all that interested in selling music with fries.

Isn’t WiFi widely available in US branches of McDonalds? Its very common in Europe.

Yes the Mcdonald’s have wifi available for $ 2.95 for three hours. Good in a pinch!

What’s the cost to iPod users at Starbucks?

My point is: McDonalds can rent Wi-Fi music. Starbucks is offering the service for free and the goal is to sell music.

What’s the cost to iPod users at Starbucks?

At the moment, it’s the standard cost for the T-Mobile network (approx: $9.95 per day, $29.95 monthly w/1 year contract, $39.95 for month to month).  What I heard in the iPod touch presentation was that there would be no charge to iPod customers once the individual markets had their networks modified to accomodate the deal (to begin with 1. New York, 2. Seattle, 3. San Francisco by the end of 2007.  Many more markets opening in ‘08).

Edit: No charge for the music store.

Does anyone else see SBUX asa buy?

[quote author=“wheeles”]This was one of the more exciting aspects of the iPod event. I’m surprised that few have really picked up on what this means. Apple and Starbucks are effectively providing a comfortable replacement for record shops as music moves from physical to digital media.

It can only serve to benefit both companies.

I *totally* agree with you on this wheeles.  If they can pull this off smoothly, it would provide a service that has never been seen anywhere.  It may very well be true that the number one question the staff receives in Starbucks is: “What’s the name of the song now being played” as stated by Starbucks CEO Howard Schultz at the iPod Touch launch (I personally have asked it dozens of times).  In many Starbucks the sound system is quite good and, depending on the store, they often play a mix of some really nice pieces one after the other.  I can easily imagine people sitting there, leisurely sipping their lattes, using their laptops, and picking off one or two tunes a day for $.99 a piece with their iPods (or any computer for that matter).  I believe this is a potetially *very* large untapped market and could be a huge success for both companies. Starbucks currently has more than 15,000 stores.

[quote author=“danthemason”]Yes the Mcdonald’s have wifi available for $ 2.95 for three hours. Good in a pinch!

Also, many AT&T Yahoo broadband customers have free unlimited access to all MacDonald’s locations as far as I know (a different subject).

God, I hope not! I think doing something like this with McDonald’s would tarnish Apple’s image and credibility. I deliberately have not eaten at McDonald’s for years* and no deal between them and Apple could change that. I just can’t see this happening personally.

* I should disclose that this is in part because I’m vegetarian, but I would not choose to eat there regardless.