Monday, September 24, 2007

Something Smells Fishy at Starbucks.....

Starbucks is giving 50 million songs to launch the new iTunes WiFi music store....that's $50 million dollars of free tunes.

My first thought is "yee haw", I know where I'll be next Tuesday morning. Getting me a no fat latte and a free song.

My second thought was "doesn't seem prudent." What's good for me, might not be so good for Starbucks. That's a lot of songs and a lot of money. Why would they give away so many songs? It only make sense if revenues are down and they need to bring in additional customers in a big way.

Third thought, it might work too well. I'm going to pay them $3 for a latte and they'll give me .99 worth of free stuff. Considering the physical overhead, the cost of goods sold and the cost of the employee makin' my latte (health care, stock options and the hourly rate), there's not a lot of profit left in that cup of joe.

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