Why Starbucks Is Trying to Launch a Media Company
Now brewing at Starbucks: content, and lots of it.
At the end of last month, Washington Post senior correspondent Rajiv Chandrasekaran announced he was leaving his job to create a new media company with the coffee giant. According to Variety, the venture will produce longform TV and film documentaries about social issues important to the brand.
The investment is a milestone for today’s content marketing boom, upending the online-first model that has become popular in recent years. Per Columbia Journalism Review, Starbucks will use its massive network of retail stores to drive people to the documentaries.
Whereas successful brand publishers like General Electric, Red Bull, and Intel have established online destinations for written and video content in recent years, Starbucks’ latest partnership harkens back to the early days of television, when entire programs were sponsored by a single corporate entity.
The move also marks Starbucks as something of a pioneer when it comes to big, consumer-facing retailers jumping into content marketing.
“I don’t think you see a lot of CPG companies and brands like Starbucks going full-force into brand publishing, but I think it makes a lot of sense,” said Intel Global Content Strategist Luke Kintigh. “I think a lot of brands are basically deciding, ‘Hey, do we want to try to activate our content in the media, or do we want to be an actual media property and create and own an audience?'”
Chandrasekaran will initially focus on creating documentaries tied to “For Love of Country,” a book he co-authored with Starbucks CEO Howard Schultz that profiles the lives of U.S. soldiers during and after their service. The book is part of Schultz’s push to make it easier for veterans to find work after they come home, which includes a promise that Starbucks will hire 10,000 former soldiers over a five-year span.
John Miller, president of the content marketing agency Scribewise, which is a division of Trellist, expects Starbucks will have an easier time diving into content because it has already defined itself as a socially conscious brand committed to making life better for veterans. However, the biggest obstacle he sees is how the new media venture will distribute its content. The brick-and-mortar distribution method they’ve detailed so far is peculiarly old-school and could lead to issues.
Those familiar with the company’s history know this method of marketing video content in stores has not always been successful. In the mid-aughts, Starbucks co-promoted two socially conscious movies in its stores, Arctic Tale and Akeelah the Bee, but both films failed to bring in a lot of money at the box office.
“I think the intricacies of execution will be the hardest part,” Miller said. “Their distribution network is their stores, which is incredibly powerful, but I don’t know that anyone is going to sit in a Starbucks and watch a movie. And maybe they’re not intending that to be their distribution network. It’s not like they can’t afford to have ‘The Starbucks Movie Hour’ on whatever network they choose.”
Details on distribution remain vague, however, and Chandrasekaran did not respond to a message requesting an interview. A Starbucks representative said the company would not be willing to speak with us.
Nevertheless Miller believes Chandrasekaran’s company is a great idea, and one that gives Starbucks a huge opportunity to strengthen its brand and build a tighter emotional connection with its audience.
From Kintigh’s perspective, the time and money required to create high quality video content can make the format a difficult proposition for marketers. The trick for Starbucks, he said, will be to create a series of documentaries that effectively lead viewers from one film to the next. That way, the brand can build a long-term relationship with consumers and maximize the value it gets from its content.
“A lot of it is thinking about it like a programmer. If you’re a television studio, how do you create a series or a format of video that will have a long shelf life and keep someone engaged over the course of multiple videos?” Kintigh said. “If you’re going to create just one video, I think that’s somewhat of a flawed strategy because the way people are consuming content, you want to ultimately have a sustained engagement with them.”
The other thing Starbucks will need to think about is whether it is willing to expose its marketing to the degree of criticism that the media usually faces. Miller predicts there will be some people who will bash whatever the company releases. With that in mind, the new venture will only be a success if Starbucks is able to take the mud-slinging in stride and retain its belief in the content it is producing.
If they do so, Miller thinks the company is poised to reap the benefits of on-brand storytelling. “Starbucks has figured out what they truly stand for, and they’re putting money behind it,” he said. “I think it is a very exciting and bold move.”Image by iofoto, charnsitr