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Brier Dudley's blog

Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

October 19, 2010 at 5:54 PM

Starbucks launches digital network, with Yahoo

How about a free digital magazine, video or newspaper while you slurp that latte?

They’re being given away by Starbucks on an ambitious new digital media network that’s launching in the company’s stores on Wednesday.

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The free Starbucks Digital Network includes premium news, entertainment and health content that’s viewable only in the stores on phones, computers and tablet devices. No registration is required, unless customers want to log in to their Starbucks account.

It’s a complete refresh of the Starbucks’ in-store digital offering, which has evolved in fits and starts over the last decade as the company experimented with partnerships with Apple, kiosks and phone companies.

“There is a pull-through of that here but the rest of it is really new, an exciting new way that we can enhance the customer experience and engage with customers,” said Adam Brotman, vice president of Starbucks Digital Ventures.

The network will immediately become a major digital property, facing tens of millions of customers every month. Last month Starbucks saw more than 30 million users logging into store networks, where WiFi has been free since last July and where the “SDN” will be the initial landing page.

More than half of the WiFi logins were done with mobile devices, Brotman said, so the network is designed to display well on screens ranging from phones to iPads to laptops.

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Yahoo built the platform for Starbucks and is powering the service, in part from its Wenatchee datacenter. It’s a flexible design that can rotate and add new content and Web applications chosen by Starbucks.

The network is largely free of ads. Starbucks is hoping to make money from the network by sharing revenue on content sold through the network, such as iTunes music and newspaper subscriptions.

Content partners are also expected to provide something special, such as free access to premium content or exclusive previews. That will enhance the customer experience in Starbucks stores and potentially draw more customers, Brotman said.

It’s not just an aggregation of Web content, he said.

“This is something where we are specifically hand-picking great partners that we feel our customers will be interested in being exposed to … getting something from those partners that they can’t get anywhere else or would otherwise have to pay for,” Brotman said.

News content includes access to premium content from The New York Times, Wall Street Journal and USA Today. Magazine publisher Rodale is filling out a “wellness” channel with content from publications such as Men’s Health, Women’s Health, Runner’s World, Bicycling and Prevention.

Apple is prominent in the entertainment channel, which has an iTunes store featuring Starbucks’ “pick of the week.” The channel also provides free access to books through the Bookish Reading Club service, viewable in a new HTML5 reading application.

A local channel – “my neighborhood” – connects to the Foursquare location service, provides Zagat listings and includes news from Yahoo and AOL’s fledgling Patch news service. It also connects to DonorsChoose.org, an organization that lets users fulfill requests made by local school classrooms.

The network is designed with a series of panels that can be rotated and updated with new services in the future. Brotman said he’s open to work with application developers wanting to contribute, although the company’s being deliberate about how the network expands.

Brotman, a startup and Corbis veteran, was hired two years ago to lead the Digital Ventures group. It now has a dozen people working with different organizations across Starbucks to create and launch new digital projects.

The Starbucks network should give Yahoo a boost. Yahoo is not only running the service, it’s powering its search feature and providing content.

Yahoo expects the network “will definitely increase” engagement and duration of time people spend with Yahoo, said Burke Culligan, Yahoo’s vice president of product management.

Culligan wouldn’t provide traffic estimates but said “it’s a really strong extension of our brand for users.”

Comments | More in | Topics: apple, Digital media, E-commerce

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