Apple and Starbucks, sitting in a tree
The most surprising announcement to come out of this afternoon's press conference was Apple's partnership with Starbucks. The new iPods and WiFi iTunes store were always possibilities. The Starbucks deal was unexpected.
My initial reaction was amusement: Well, that's a silly thing! But now I get it. They've turned something that costs Starbucks money into an opportunity for profit.
Consider music videos. Five years ago, there were pricey ads that consumers got for free and generated no income. Yes, you may argue that they influence the sale of albums and concert tickets, but in and of themselves, music videos weren't making money.
Now Apple sells videos in the iTunes store. People pay to watch the advertisements.
Retail chains pay a fee for the music they pipe into their stores. Just like the music videos, Apple has created a profit opportunity for Starbucks (and themselves, of course).
Still think it's silly? Imagine when ten retailers are on board. Or twenty. Or television networks. Grey's Anatomy ends with a description of the week's featured pop tune. Why not grab it then and there?
When this catches on, it will be big.
