The brands behind Starbucks digital domination

Starbucks’ quest to become a leading digital network continues with an announcement that customers are now to be given a free digital magazine, newspaper or video to enjoy with their skinny muffin.

The brand, whose social media presence ranks in the ten most popular sites worldwide, is now going to offer customers access to the Starbucks digital network, which is free, requires no registration and offers news, health and entertainment. Worrying news for libraries all over the world, maybe.

But what’s most interesting about this news is that incumbent internet player Yahoo is providing the platform for this network. Yahoo has has started whitelabeling aggressively, creating new business models in the digital space the Yahoo brand will have a lesser role to play.

At a Starbucks in the US, A host of partners including Qualcomm delivers in store connectivity. This move would lead to more spectrum usage for browsing and more data will be consumed – the telco here is also white labeling and providing its spectrum yet there is no need for the mention of the telco brand In the observations above – the whitelabeling or wholesale model typically has 50% higher profit margins. So this would be better and more profitable business for both the telco and the internet player without insisting on its brand!

What this moves demonstrates is that the stronger the power of your brand the more spaces one could occupy within the consumers mind. Digital Network service brought to you by “a strong Starbucks brand“ as compared to brought to you by Yahoo or AT&T!

Ashish Thomas