Starbucks spokesman defends charging for Internet access

Free wireless Internet has become the standard at independent coffee shops, but Starbucks is sticking with -- and defending -- its subscription-required T-Mobile service. A Starbucks spokesman tells Advertising Age: "Some establishments may choose to provide free wireless access, but we believe the T-Mobile HotSpot service provides a much more rewarding experience by offering internet access in the comfort of Starbucks coffeehouses in far more locations." As others have pointed out in the comments section, Starbucks is not a real "third place" as long as it charges for wireless access -- especially when 98% of indie coffeehouses offer it for free. (Advertising Age)

Comments

[Homer]

Joel,

You clearly have no idea what you're talking about with regard to internet security. As long as you are using a secure tunneling protocl that encrypts end-to-end (ex: SSL), you can communicate securely on ANY network. Given that, your implication that T-Mobile is somehow "more" secure than any other provider is incorrect.

"What it really comes down to is you are the type of customer that we'd probably rather NOT have in the store."

What, do you hang out at the Elite Starbucks? What a snob. And I don't think Starbucks cares what type of customer is coming in as long as they're able to pay for their drink and are not a disruption.

The ignorance of the masses never ceases to amaze me.............

People, Starbucks does not charge for access. T-mobile does why is that so hard to understand?

Second, Starbucks see's no revenue from T-Mobile for it either. If any of you had any type of long term memory you would remember when the deal was announced that all Starbucks did was allow locations for T-Mobile. In return Starbucks got to claim that their locations were hotspots but T-Mobile had to pony up many hundreds of thousands of $$ (if not millions) to install all of the equipment and they also have to maintain it.

I suppose they should have just done that out of kindness for us all and not even try to recoup their money though huh? How much free stuff is the company your working for now give? Or you for that matter................. Yea, I thought so.

Oh, and bear in mind those "free" networks you love to spout on about are in no way free. They are paid for through advertising, taxpayer dollars, marketing or business agreements ect. There is no free access out there.

So go on and keep deluding yourself about how great you are for snubbing your nose at Starbucks over this...............fools

[Herman M.]

***sigh***

I wasn't going to type anything but that, and then I saw the absolutely silly comment about how Starbucks not having free internet service would bring a national disaster response to its knees. That was a really goo larf, ms. anonymous.

Do you really want to blame starbucks for the slow response in New Orleans? Golly, I hope not, because that is just lame. There was no reliable telephone service immediately after the storm anywhere, much less internet connections. That is, for anyone EXCEPT the federal relief teams. They brought their own and used satellites to get it.

"Oh, so sorry, we can't help you because Starbucks wanted to charge us for internet. We're going to help the next city over where the indie shop has free wireless."

That really made no sense to me.

[Darleen]

Herman,
Thank you for saying just what I was thinking! To think that someone actually thinks that way is beyond me, but then again some of these posts leave me with my mouth wide open at times.

[pepperminthotchocolategirl]

Actually JT I used to go to Starbucks at least once a week. So yeah..umm I'm not cheap. Not when I'd spend 5.00 on a drink and leave a 2.00 tip. So yeah I think I've got an opinion, especially when I give you 2.00 extra every single time to make my drink. Basically I'm paying you a buck a minute to make my drink. Nice of me to do that isn't it..oh wait I'M CHEAP according to you. Well there goes your tip since I'm sooo cheap.

But yeah I'd like some free wireless. I mean seriously, if I just want to use it for a few minutes, like to check on emails (like right now I have a family member in the hospital..it's nice to get updates when I need them on the computer as the hospital offers free wireless internet, so we can take our laptops in there and send messages to people etc etc..see the benefits of wireless!) So yeah it'd be nice. Like I said, with a drink you get so many minutes. If you want to use it longer compared to whatever time they give you during your drink purchase, then I would suggest getting the T-mobile plan. But if we buy a drink, give us 20 minutes of computer time. I think that's fair. Anything over that and you need to get the plan. That way, everyone wins. Those that like to stay longer to do work, get the plan. Those of us that just want to do a quick check, tahdah! We're saved from spending more!

[Tall Drip]

I'm seeing this as more of a PR/customer relations issue for Starbucks. The hit SBUX eventually takes on this, assuming it has the T-Mobile contract for X more years and continues to charge, is at the moment difficult to quantify.

I just think there will be a PR problem with this, if there isn't one already. It's inevitable, if you have so many other businesses *not* charging for wi-fi. The vast public doesn't CARE about the terms of the contract with T-Mobile, or about T-Mobile recouping its investment. All the public is going to know is that Joe's Brewpub & Dive Bar down the street offers its customers unlimited free wi-fi (fictional name, but based on reality in my hometown), but Big Money Starbucks doesn't.

It doesn't take a SWOT analysis in a Wharton MBA management class to be able to recognize this as a problem.

[IMHO]

Is this what Howie was talking about... getting away from our core values?

I missed the memo about our name change to Starbucks Internet Cafe.

[HopkinsBella]

"There are MANY cities in the U.S., especially in the more rural areas, where Starbucks is the ONLY coffee shop in town, other than little hole-in-the-wall cafes that don't even have a place to sit, let alone WiFi access. So it's T-Mobile nor nothing."

Au contraire, Rob. Having moved to the east coast from the sticks myself, I can tell you that central Iowa did not get a stand-alone corporate Starbucks until 2002, but had several local coffeeshops and internet cafes. Same goes for central Nebraska, where the town my parents live in will finally get their own corporate store location this month; this same town also has its own popular coffee shops and wi-fi access.

I hate to tell you, but we were not sitting around out there twiddling our thumbs, waiting for Starbucks to bring working wi-fi to those areas. I just don't know *how* I am able to check *teh intarwebs* via wi-fi when I go home for the holidays....(sarcasm)

Pepperminthotchocolategirl: are you in Ft. Collins, perchance?

Actually JT I used to go to Starbucks at least once a week. So yeah..umm I'm not cheap. Not when I'd spend 5.00 on a drink and leave a 2.00 tip. So yeah I think I've got an opinion, especially when I give you 2.00 extra every single time to make my drink. Basically I'm paying you a buck a minute to make my drink. Nice of me to do that isn't it..oh wait I'M CHEAP according to you. Well there goes your tip since I'm sooo cheap.

You know your whole blog makes absolutely no sense whatsoever. But I had to comment on the tip part, how do you know you are tipping JT? Please give it a rest. Your logic is rediculous to start with, why should they offer you free internet because you purchase a drink? What are you smoking????

[pepperminthotchocolategirl]

Nope I'm not in fort collins.

And I don't know if I'm tipping that person or not. I just always put 2.00 in the tip box when I go in. And why should the offer free internet..as stated above PR. You keep us happy we stay. Plus isn't Starbucks policy JUST SAY YES!?

Whether you tip us or not, us poor baristas have no control over whether Starbucks uses T-mobile or offers free wireless.

[yo]

starbucks does themselves a disservice by not offering free wi-fi.

when hanging out at a local coffee shop, i have seen countless business people walk in to the starbucks across the street and promptly walk right out b/c of the fee based internet service.

more often than not, they purchase a drink, get settled and have to leave b/c the place that they were going to spend time and money, didn't have what they were looking for.

starbucks is slowly going down the tubes.

first it's charging for internet service, now it's upseliing pastries, later it'll be pinching pennies.

tsk tsk.

[SeattleInvestor]

My irritation is I want a easier way to pay. Why go through the hassle of signing up and a monthly fee for occasional use? My solution is I added data services for $15 a month to my Sprint wireless and gateway my laptop through that. The access is fast enough for most web work and email.

Other posts have discussed other thoughts I have on the topic:

- T-Mobile provides the service at no cost to Starbucks. Starbucks would have to invest a lot in IT services to keep this running in each store.

- It gives the independents a chance to differentiate. But, I am not sure if they are really making more money due to the free loader effect.

- I am sure there is an existing business agreement that has a multi-year term and Starbucks gets to re-think at a expiration time. They get to decide if they want to be in the IT wireless business, or the coffee business.

- People discuss "security". The only security can be at your own laptop, not rely on the infrastructure being limited by an account.

- People are right in that if the stores get to crowded, it could drive paying Starbucks customers away. The whole idea is to turn over tables at a decent interval, and not have a bunch of road warriors and real estate agents parked in there all day.

[John]

No free wi-fi is fine by me. This means that there still exists one coffee place I can go to without having to fight for a seat.... seats taken up by people not buying anything in the coffee shop, but using the free wi-fi. I hate those jerks and they can take their laptops elsewhere!

[itsnotamermaid]

What I want to know is: if you have the t-mobile hotspots, but the city in which your sbux is located offers free wi-fi, is there a way for t-mobile to block that access or will you be able to access both from inside a bux?

[Mike]

One possible solution might be to give customers a 30 minute free access key, every time they purchased something (unique, one-time key, printed on the receipt). That might make the "I just want to check my email!" types happy, as well as ensure that people didn't spend all day in the store.

Of course, if you wanted to loiter all day, that's fine, but then pony up for the daily access pass or a monthly T-Mobile subscription.

The technology to do this doesn't exist (Starbucks would need to integrate their point of sale systems with T-Mobile's wireless authentication mechanisms)...but it's not impossible to do so.

The thing I don't like about the "free" solution is that I'm actuall paying for it anyway, even if I don't use it. I rather have a choice than have an extra $0.10 added onto every purchase without me knowing it.

Mermaid,
The answer to that is no. Most computers are set-up to auto connect to a specific wireless account but if you open your "list of available wireless networks" you'll see all of the wi-fi signals your computer is picking up along with their relative signal strengths and if they are secure or not. From there you just connect to whatever one you want.

Note that I've done this is several Starbuck stores in cities that have "free" internet but have yet to come across one anywhere near as fast or reliable as T-mobile. You get what you pay for as in most things in life.

Also, the above assumes Windows OS. I'm not sure about Macs or Linux but would assume something similar. Base answer to your question though is that T-Mobile doesn't filter out other signals.

peace

[technocaff]

FWIW, I am in coffee shops, on average, 2-3 times a day between meetings. The *sole* reason you will find me at anywhere but Starbucks is the lack of free wifi.

Having just looked over the last few months of my expense reports, the crappy (and expensive) T-Mobile service has cost SB approximately $75/week. I wager I am not the only one opting for the competition.

As has been mentioned elsewhere, the idea of a 30 min "pass" would be attractive (I'm certainly never one place more than that). It doesn't really address the fact that T-Mobile can be a flakey provider...but baby steps are good....

[Will]

I think every barista reading this post should write a mission review to their regional offices or to seattle to look at this.
It might make sense from an infastructure standpoint, as far as them not having to invest in wifi through a single carrier (which, with wifi technology being as cheap and readily available as it is, probably isn't as hard to do as it was when the T-Mobile deal was reached), but the fact is, if starbucks is fine with losing the customers to indie coffee shops, then they're ignoring "creating enthusiastically satisfied customers ALL OF THE TIME."

Not "making those customers who want to pay for T Mobile satisfied" but "creating enthusiastically satisfied customers ALL OF THE TIME." Period.

THe above post commenting about the $75 dollars lost on a single customer is a tremendous point. I'm sure that those would-be regulars that choose to go to indie shops add up quite a bit.

It really DOES seem like a PR disaster waiting to happen. I've seen tons of dissastisfied customers leave in frustration when even MCDONALDS offers free wifi at many of its locations. I'm very curious to know what kind of kickbacks starbucks receives from this, or what the term of the contract is.

[pretty shifty]

I go to the coffee shop down the street on my breaks for the quiet and free wi-fi. take a thirty and check out the competition. you might like what you see TOO much.

[Slater]

Ok yeah i live in a van and i dont bat an eyelash over paying the $30-40 a month for t mobile if i need it almost daily, even every other day, paying $1-2 a day for the service is not such a big issue, you consider it is a business move on *$ part not an accident, and starbucks unfortunately is not an aging dinosaur and probably is not going any where any time real soon. The price of the t mobile is not what i would really complain about altough, sure a maybe a reduction in price would be descent, but to you may want to consider that fact that even some of the laptop using customers dont want the access to be totally free perhaps the store there is in a very high traffic situtaion and therefore gets all kinds of scraggly loiterers with old or cheap laptops and lower class. Now im indeed homeless, but i dont think thats an escuse to have no class or dignity. Many homeless people disgust me with their helplessness. at the same time i realize that many of them have had a great adversity and thus it is not right to stereotype them (us) lol anyways hopefully my situation will get better. Its quite expensive to live where im at in southern cali (about $1000 a month for a studio rental)and i have a dependent diabetic mother who is homeless with me and ive had to do some crazy stuff to survive. Ive sat on the side of a very busy street with a large sign saying homeless please help etc. Whats amazing to me is how little a rich person will help you. The poor give to the poor, the rich are truly for the most part extremely selfish and greedy people. unless i tell someone im homeless, they would never guess. cuz im not a tweaker or bum, ive worked hard for years and now im finally working again after months of hard times here where its quite pricey. I know im off subject and im probably gonna get flamed quite badly for it, but f*ck it...im just adding in some extra notes, cuz it makes me sick to think that the person that cares the least is the person that has the most. The person whos least likely to sympathize with you in any way is the person who could help you the most. We all live in a free country with an equal opportunity. An equal opportunity to use what we have to benefits ourselves pretty much any way we want. The part that is not equal is what we are born with. some people are born with family support, other people are born with no family and yet other people are born to support their family. I can tell you this is an extremely stressful situation when there is no financial foundation whatsoever to start with. And when you you have somewhat different ideals then the person you take care of. You love them but you hate them if that makes sense and at the same time they might have a problem like my mother for instance who is diabetic and under the circumstances that she has an "insulin reaction" she could die, and therefor i basically feel obligated to live with her the rest of her life (maybe mine) ...im a 29 year old guy, you think i wanna tell people i live with my mother? it wouldnt even be so bad if i could say that i lived at home with my mother, but in my case its like my mother lives at home with me and is like a ball and chain to me in many ways. so anyways that how i feel right now and im actually indeed thankful that things arent much wrose although i can definitely say that life did not go as i would have preferred. The depression and guilt about choices made would surely drive many people crazy. I just hope that in the future, people move more towards understanding the value of activism and focus on issues that really matter to people...not just families...some people dont have families. Some people dont have a co signer, or a grand parent or a bedroom to call their own.

anyways im doing some internet marketing to supplament my day job, so if you want something to keep you busy, check out this personals website.... its for alternative and gay and lesbian daters ...im looking for people who would be open to starting their own home based business....its an affiliate marketing program for friendfinder...can you use some extra income? http://alt.com/go/g1930-brk also it has links to other parts of the network for regular personals as well. So please take a moment to visit. peace

[Darleen]

Slater,
I hope you find some peace soon, and that your life turns around and you land on your feet again. Good luck to you.

[D]

Sure puts things into perspective. God Bless you, I've been there, stick it out.. things will change.I know you're not looking for pity, but people in this situation really touch a part of my heart that even after 8 years I still can remember how it felt.

Please feel free to email me anytime. My email address is [email protected]

[Sean]

i could be totally wrong in my assumption, but think about it. i remember back in the day when no one offered free wifi. starbucks then came along and offered tmobile internet. it would make sense that starbucks was so quick to jump on having wifi that they got themselved over their head in a contract with tmobile, and now they have to ride it out while everyone around them offers it for free. like i said, i could be wrong, but intuitively it makes sense.

[Jeff]

Hi,

I'm always at least a step or two behind in the modern technology world, but I just got a Nintendo DS and a web-browser for it. I know it's not much, but I love to game and figured it'd be nice to have access to the web on a portable, albeit very limited (no videos or MP3s, I can just surf the web and blog but that's enough most of the time).

I'd been having problems connecting at home, today's my day off, so I figured, a Starbucks just opened near me that I'd been to a few times, why not go there for awhile, surf the web on my DS from there, and have a few Frapphchinos?

So when I order my cold coffee beverage, sit down on the plush seat and fire up my DS, I find out to my great surprise, that I have to PAY for wireless. I guess in a sense I'm pretty naive since it took me awhile to find an article like this one. But that's outrageous to me.

I can understand some of the arguments in favor of Starbucks charging for wireless, but to me, it seems like throwing the baby out with the bathwater. I would have been willing to hang out awhile and buy a few more drinks, but I wasn't willing to pay for wireless too. As others suggested, why not make free wireless conditional on your coffee purchases? An hours' free wireless in exchange for purchasing a vente frappichino sounds fair to me.

[Robert]

Went to my 1st Starbucks yesterday. I have been a regular customer at a local coffee place. I purchased my coffee and something to nibble on and sat down. I fired up my laptop and found out the internet was a fee based service. I was very upset. after spending over $7.00 and planning on buying other coffees to learn I was going to be nickel and dimed on the internet. I high tailed it to my local coffee shop, vowing to never return. I will avoid Starbucks and make sure I spread the word. In my mind, it was a very bad customer experience. To think they would be so cheap. I grew up in the restaurant business, one thing I was taught, people have choices! You have to give people a compelling reason to be loyal and make them feel as thought they are receiving real value. Maybe I am just not a Starbuck's type of customer, I like how the local shop owner stops by my table to see if everything is fine, makes me feel welcome and tells me please hurry back when I am leaving. And then there is the free wireless internet as well (nice touch).

[thisdood]

maybe they will figure out what the other shops already have.... free wi-fi costs them how much a month - like 5 or six big ass coffee's? small price to pay when those customers that go across the street for that small service could be spending at starphucks...
not a big deal for me as i am not a fan of the starphucks, but apparently its buggin some people i know, and now with all the people on here as well.
they know they have a loyal customer base and the "lowlifes" that expect free wi-fi prolly arent welcome there anyhow.....

[brandon]

I am a regular customer. I don't see what the complaints are. I really don't.

I work online building websites. work for myself. Well, I'm in a place right now that I don't have internet access yet (just moved last week).. changing here next week but as of now no go. For me the internet is more important that water. I work online!

Just so happens there is a starbucks 2 blocks from my apartment. So I pay $40 a month for my starbucks/tmobile account so I can basically do my website work at starbucks.... but while i'm there.. I drop easily 10-15 bucks per day on crap. that they would not get if they did not have the internet.

becuase it's not free, I have no problem getting a seat. I don't mind paying at all.

[Thomas Wilson MD]

I used to frequent Starbucks often to do business with associates and of course drink and snack. Since they began charging for internet I have not been back once. I am convinced this policy is responsible for their current financial woes. It seems so obvious to me. Of course, after I recently learned of Starbucks left leaning politics I thought it better to drink coffee or tea at a neutral location anyway.

[Carol Preston]

I SAY; "Starbucks T-Mobile users at $9.95 per 24 hours of access unite!!!" If I am going to be charged that much for a 24 hour period of time by Starbucks then I am legally entitled to be IN Starbucks for that 24 hour period. If enough paying customers sat in Starbucks for the entire 24 hour period then I think that outrageous sum would quickly disappear. Twice a year I go to a campground that charges for internet access and it cost me $2.95 per day or $10 per week. I pay it without complaining because it is fair.

[???]

Really? You should realize that Starbucks doesn't charge you - Tmobile does. They were willing to go under contract with them to make sure that almost all 7500 stores have wireless access. Otherwise, it'd be inconsistent and shotty depending on which store you went into.

I also second, but there will be free AT&T WiFi access switching out the T-Mobile by summer.

[GGDeluxe]

Theres nothing wrong with free wifi. The Starbucks on 17th and Broadway has a ton of power outlets too.

So I want to use my laptop in the Ikebukuro Starbucks in Tokio. There are two power outlets near the free table so I use them with my laptop today.

The manager tells me 10 minutes later to unplug my computer.

FVCKERS

[John]

There is better coffee out there in a more comfortable setting which includes free wireless, and it exists in every town. Charging for wireless is foolish. That being said, if Starbucks wants to be foolish, that is their decision. If somebody wants free wifi, then they should not be standing in line with the rest of the corporate sheep at starbucks. Get out of line, go down the street and get a tasty cup for less money and sit on a nice comfy couch while you play with their free wifi. While you're sitting there, don't be so bitter about the fact that you had to go there instead of Starbucks that you get online and complain about their bad business decisions.

Bottom line? Some companies charge for extras; if you don't want to pay for extras, go somewhere else. You might find out you like it better there anyway.

[crowdSPRING]

I don't want to pay any extra compared to what Starbucks already freakin charges me. Cause I've actually stopped going to Starbucks like I used to.

[crowdSPRING]

I don't want to pay any extra compared to what Starbucks already freakin charges me.

[Simply]

OMG, I remember having to pay for internet usage at Starbucks. I only did so once and it cost about $10.00 for a couple of hours. It was ridiculous.

It's always amusing to hear PR spew crap out of their mouths. The reason for them charging is so that they can enjoy internet at the comfort of the coffee shop? Aww, isn't that nice! Except that doesn't answer the question - why charge when others can use WiFi at other locations (comfortably) for no charge?

Hmmm maybe because it's profitable?

They didn't even address the question, all they did was deflect and make it sound like they're doing it for "our comfort" BS

[Simply]

JT - apparently not. Now that they're free, I've never experienced a lag because of it. Guess people have better things to do then stick around a coffee shop so that they can facebook for hours.

You call people cheap because they don't walk into your establishment throwing $20 bills at you? LOL. I bet you work at Starbucks as a coffee maker.