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Retail

Starbucks: Giving Away 50 Million Apple iTunes Download

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By Douglas A. McIntyre Published
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It is not a good sign. Starbucks (SBUX) will give away 50 million downloads as part of its new service with Apple (AAPL). The venture allows iTunes customers to go online for free at Starbucks locations and  connect to the download service.

According to Reuters from October 2 to November 7 at more than 10,000 U.S. Starbucks locations, customers can receive "Song of the Day" cards redeemable on Apple’s iTunes store for a complimentary song hand-selected by Starbucks Entertainment.

At the standard iTunes rate of $.99 a song, the deal could cost Starbucks $50 million. And, it is giving away a WiFi connection that it usually charges for through T-Mobile.

Why would Starbucks do this? It may be that foot traffic to its stores is slowing. Same store sales at the coffee chain have been modest this year. SBUX management could be seeing more of the same for the fourth quarter and are willing to invest in the iTunes promotion to help move the numbers up.

Giving away songs. Not a sign of strength.

Douglas A. McIntyre

Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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