Can Starbucks Become A Media Company?

The coffee retail giant recently launched a new media company. Can it succeed? What is Starbucks trying to do exactly?

Towards the beginning of this year, Starbucks made an announcement. No, it wasn’t the return of the birthday cake Frappuccino or Oprah’s newest tea-infused, wheat grass latte. They announced they were starting a media company. Washington Post senior correspondent Rajiv Chandrasekaran announced he was leaving his position to join the coffee giant. Together they would embark on a new venture to produce long-form TV and film documentaries about important social issues.

Seems like a good move. But, why?

Starbucks is making a move here, but to understand it fully we must realize that there are two laws at work.


The Law of Attention. If you have attention, you can have anything you want.

Starbucks has attention, lots of it. One might argue, however, that it’s “coffee attention,” which certainly only gets you so far. What if they could leverage that “coffee attention” to get more attention? Maybe media attention? Now we might be onto something.


The Law of Big Media. Big Media companies run the world.

Honestly, I just made that up, but let’s pretend it’s a real law for the moment.

Here’s what Starbucks knows that we may be missing: We grew up in a world where the big media companies had names like NBC, ABC and CBS. Throw in ESPN, FOX, CNN and a handful of others as well. It was a world where attention was controlled by broadcast television.

Their influence, however, has slowly been eroding over the last decade. In the very near future (some might argue, today), the largest media companies in the world will be (are) Facebook, Twitter, LinkedIn and Instagram. Our children will grow up with social media the way we grew up with network television.

In the midst of Facebook’s disappointing IPO last year and complaints by users of privacy changes and content ownership, it would be easy to miss the fact that Facebook is the world’s largest data company. It only makes sense that they’re positioned to be the world’s largest advertising company as well.

What about some of the new players on the block? Certainly the list of social media companies is not exhaustive at this point. Snapchat, the quirky little social network that has parents concerned and teenagers joining by the millions turned down a purchase offer from Facebook in 2013 for $3 billion.

Why would they turn down that much money, you ask? Because they recently raised a round of funding that values them at $10 billion. All this for a company that still has zero revenue. That alone should prove the worth of attention.

Starbucks is very aware of this. I would imagine this is the one thing Howard Shultz probably lays awake at night thinking about. “Why are we not in that list?”

Starbucks sees the attention shift that is happening and wants to position their company to be in the game. Does Starbucks sell coffee? Yes. Does Starbucks have lots of attention? Yes. Can they leverage that attention to get more attention?

That’s why they started a media company.

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