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Ubiquity = Starbucks (continued)
This is actually my third post on this topic. At 10th Street and Hudson, there's been this crumbling building on the southeast corner for years. At one time there was a pub there. For the past three years I've watched that building slowly but surely get rebuilt. And they did a nice job as they kept the early New York brick townhouse look, but just modernized it.
Yesterday I was passing the building and noticed that they put a Starbucks in the first floor retail space. I guess I should have seen that coming. If they can have Starbucks in ski resorts and the Forbidden City, they can have them on an ordinary corner in the west village.
And then yesterday afternoon, I heard the news on Michael Goldberg's MOG that Paul McCartney had signed a one record deal with Starbucks because,
“It’s a new world now, people are thinking of new ways to reach the people. For me, that’s always been my aim.”
Starbucks apparently opens eight new stores a day. I learned this on today's Wallstrip. Which I will end this post with. Talk about ubiquity. They are everywhere, they are a record label, they are a wireless isp, they are a meeting space. Starbucks sure seems to have a master plan that's working.
Does that make it a good stock to own? Not sure about that. Here's Wallstrip's take Starbucks (SBUX). Stick around for the funny part at the end:
Comments (14) | Posted March 22, 2007 in NYC
Comments
periodically over a very long period of time, shares of sbux get crushed due to noise or myopia or some other chazurai. if you look at a 12 yr chart you will see that it happened in '95, '97, '99, '00, '01, '02 - almost every year...
on every one of these occasions, buying the booch resulted in handsome lt gains... this time likely no different.
Posted by: Phil | Mar 22, 2007 9:13:01 AM
Agreed. With foam on top.
Posted by: Scott | Mar 22, 2007 9:57:22 AM
In 1995, my then girlfriend was ordering frapachinos by the truckload.
So I asked my stockbroker what he thought about buying a little SBUX. His answer was:
"How much bigger can they get?"
I didn't invest. They were at the equivalent of $2.
Posted by: Rick | Mar 22, 2007 10:24:24 AM
its about the lifestyle that they have entrenched themselves into our daily lives. phil is correct.
Posted by: howard Lindzon | Mar 22, 2007 10:35:50 AM
So, is the idea that Capitol Records is the crumbling building slowly but surely getting rebuilt as Hear Music by Starbucks? Nice example of the megastar moving down the long tail!
Posted by: Bill Olen | Mar 22, 2007 11:37:04 AM
I wish they'd just build one in our breakfast nook and get it over with.
Posted by: Andy Swan | Mar 22, 2007 12:51:39 PM
An interesting thing about all the new types of "record labels" that are emerging (Starbucks, Apple, etc) is that they don't care if they make any money on music. They're in it for the brand extension or to support other high margin products.
ITMS is essentially cash flow neutral.
I bet Starbucks makes more profit selling one large frappacino than they do selling a CD (even if they are the record label). I also tend to doubt that Starbucks will ever do anything in the artist development arena, they'll sign already established brands.
Posted by: Erik Schwartz | Mar 22, 2007 2:59:41 PM
The brilliant thing about Starbucks -- and I went to the one in the Forbidden City before they closed it -- is how careful they are about protecting and deepening the in-store experience. That's where the music really adds value. It just makes the store itself an interesting destination, which lets them stay competitive (and fresh). Even though every single goddam Starbucks smells like a blueberry muffin.
Posted by: Rob Long | Mar 22, 2007 3:26:25 PM
andy - your comments are now better than mine. find someplace else please :) .
Posted by: howard Lindzon | Mar 22, 2007 3:34:44 PM
When are you going to trim your bangs?
Posted by: Mike Hunt | Mar 22, 2007 4:19:39 PM
I laughed out loud at Andy's breakfast nook post.
So true.
Posted by: Rick | Mar 22, 2007 11:24:28 PM
jackie mason had this whole $4 for a coffee madness summed up a long time ago; his live sketch (with vitriol in his unique style of delivery) is highly recommended to put it into perspective.
anyway, many people are heartily sick and tired of ubiquitous branded franchises standardizing the world - give me an independent, any day. and as for mccartney, well ... clearly, he's lost the plot entirely; a bit more dylan thomas ('do not go gentle') would be welcome, paul.
we've just saved one of our wonderful local music venues from the claws of the alcoholic equivalent of starbucks over here, wetherspoons ...
http://wifiwabbit.blogspot.com/2007/03/fall.html
Posted by: carl rahn griffith | Mar 23, 2007 7:52:46 AM
Is that the one that replaced The Blind Tiger ale house? Those bastards. Anyway, Blind Tiger has a new location on Bleecker and still serves one of the best selections of beer in the City!
Posted by: James | Mar 23, 2007 11:35:24 AM
I don't find chains disconcerting in general, but I think Starbucks is especially benign. Granted, there have been coffee shops that have been forced out by their leasing arbitrage or force of nature marketing. However, I generally think they've created a new market by combining exclusive ambience with candy for adults.
Posted by: Phil | Mar 23, 2007 2:32:14 PM
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