Starbucker

by John Quiggin on August 23, 2004

I found this story of globalisation and soft power at charlotte street, via bertramonline. As bertram says, you can’t make this kind of thing up.

I had a look at related issues in this piece

{ 85 comments }

1

bad Jim 08.23.04 at 12:07 pm

“they don’t seem to have a cafe culture in Italy, do they?”

Starbucks is actually in the business of serving milky confections – decaffienated nonfat lattes topped with whipped cream – so the confusion is understandable.

(I’m annoyed that American cafes don’t serve wine.)

for middle-class consumers in developed countries, exposure to McDonalds and Starbucks leads to the equally misleading inference that American living standards are far below those prevailing in their own countries

2

chris 08.23.04 at 1:22 pm

You mean Starbucks is a cafe? I thought they were municipal toilets that prescribed a mild diuretic to help along people who suffered from embarrassing personal problems.

3

Scott Martens 08.23.04 at 1:46 pm

I see your point about the rise of American icons being linked to the economics of scale. A Canadian can hardly avoid recognising that there is at least some truth to it. But, I note that some of the commenters from your post last year are already seeing the end approaching for American economies of scale.

Responding to some of Jack Strocchi’s points from that post, if you’re looking for a generic Eurobrand able to compete with McDo on economies of scale, I’d say Quick Burger is the perfect example. It is slightly cheaper than McDo and appears to be do a better job meeting local tastes. And, I’d look for the post-9/11 immigration nightmare to undermine the gains the US gets from international recruiting.

As for English, it is beginning to act as an informal trade barrier, blocking American firms from exporting while foreign firms are able to export to the US easily. Translation and multilingual marketing costs, hiring bilingual staff, difficulties working in a foreign business climate – these all favour firms that can make big gains in the size of their potential market by moving into just one foreign language market – English – while firms from English speaking countries have to do just as much translating and marketing to enter a much smaller non-anglophone market. Add to this how much more likely an overseas firm is to have ample English language abilities in its existing staff, and the greater likelihood that they’ll know Americna business law and business conditions, and it starts to look like the exchange rate on the dollar isn’t the only reason the US has a trade deficit. The gains from exporting to the largest overseas market are always smaller for Americans than for others. An overseas firm that makes a comparable product for a comparable price and sells it locally has a lot more to gain entering the US market than a US firm has in entering their local market.

4

E. Naeher 08.23.04 at 4:18 pm

(I’m annoyed that American cafes don’t serve wine.)

Mine does.

Yes, I’m a spoiled, spoiled man.

5

Eliza Dashwood 08.23.04 at 4:53 pm

There is a sort of mini-point buried in that traveller’s comment.

Italian café culture has always struck me as quite distinct from French, German or Austrian café culture.

People tend to knock back their expressos quickly at the bar as opposed to lingering at tables reading and chatting.

Not that they don’t ever linger and chat, just that they seem to do it less than elsewhere on the continent.

6

des von bladet 08.23.04 at 5:11 pm

Scott, does “generic” mean Francophone there?

Which brings me to a point: the last article I read on European cinema (I forget where; probably Courrier International) made the point that in any given European country market share was increasingly divided between American and domestic product – other European films were a commercial non-starter.

And the same goes, presumably, for all sectors in which the Engleesh is pertinent – a French company can certainly dream of targetting the USA, but Portugal or Greece or Slovenia? Maybe not. Which means they will be starting from a smaller scale of economies of scale at best.

(For the record, I yearn for Finland’s Hesburger – those mighty burgers of Hes! – to go Yoorp, and even more so for the magnificent Lido chain of cheap and hearty Latvian fare. But I do not hold the breath.)

7

Nabakov 08.23.04 at 5:12 pm

Microsoft’s come a bit of a cropper over this kinda thing lately.

Reminds me of Seppos in Morocco marveling over the fact M&Ms were available there. “Hey look, it’s almost like the real thing ‘cept it’s got Arabian writing.”

And also of Aus shock jock, Alan Jones, complaining about Nokia’s sponsorship of some Aus sporting event or team as more pernicious Japanese influence.

And young Guy sure was right about the whole “society of the spectacle” thang too.

8

David Sucher 08.23.04 at 5:16 pm

Why this hostility to Starbucks? (Perhaps it’s from people to young to remember a world when you couldn’t get decent coffee anywhere.) Would you really prefer a world with no Starbucks? If you don’t like Starbucks, just don’t go.

I am bemused by the pretentions of people who think that it is a blow for high culture to condemn Starbucks. It only shows lack of any historical perspective on American culture, as well as English coffee. (I remember being in London in 1992 and being appalled at the lack of a decent cup of coffee and looked forward to Starbucks or its clones.)

9

Nabakov 08.23.04 at 5:43 pm

David,

a) there’s always been lotsa places in the world where you could get a decent coffee.

b) Buttfucks doesn’t serve a decent cup of coffee.

10

Nabakov 08.23.04 at 5:46 pm

David,

a) there’s always been lotsa places in the world where you could get a decent coffee. You should have got out more and seen the world.

b) Buttfucks doesn’t serve a decent coffee.

11

momo 08.23.04 at 6:07 pm

Eliza, that is actually true, in a way. I guess the lingering and chatting happens more often over drinks, and before dinner, during the ‘aperitivi’.

So well I suppose if one was looking for a “café culture” that’s exactly the same as in other countries then one wouldn’t find it. Of course, who in their right mind would want to go to Italy, or Britain for that matter, and look for the exact same lifestyles and brands and flavours they’re already familiar with? It kind of defeats the purpose of getting a plane ticket in the first place. But hey, wonders never cease.

By the way, there’s been talk of Starbucks opening in Italy for a while now. It’d be fun to see how that goes down.

12

momo 08.23.04 at 6:16 pm

David Sucher, you are strongly discouraged from reading this thread, positively frothing like a cappuccino with Italian-American hostility to Starbucks… don’t say I didn’t warn you!

13

Scott Martens 08.23.04 at 6:36 pm

Des, maar Quick is een Belgische firma. Je weet dat België is geen eentalige land?

The first Quick was opened in suburban Antwerp in ’71. Not francophone country. Personally, I came to love Imbiß stands, sandwich mergez and kebab during my youthful European studies, but my lower intestine begs to differ in my old age.

Er, I mean Imbiss, thanks to the spelling reform.

14

David Sucher 08.23.04 at 6:55 pm

Complain about it all you like but you benefit from Starbucks because Starbucks created an industry.

15

Des von Bladet 08.23.04 at 7:11 pm

Scott: Mea culpa. The Interweb misled me by being of the opinion that their extension has been mostly in Francophonia:

“Quick Restaurant is one of Europe’s leading fast food chains with more than 400 locations in France, Belgium, and Luxembourg.”

What’s put them off the doubtless lucrative Dutch market s’ils parlent nativement la langue de – euhh – Cruyff?

16

Eliza Dashwood 08.23.04 at 7:36 pm

Momo, I’m sure SBUX in Italy would do just fine. It’s been a smash in Vienna and the Austrians are no coffee slouches.

Say what you will about SBUX, I agree with David, it’s made it possible to get a good capuccino. Nabakov’s obviously a young un if he thinks it was always easy to get a decent cup of coffee. Always available in a big metropolis? Yes, not possible to always get to Little Italy or the Hungarian Café on your 10 minute coffee break.

Anyways all you Starbucks lovers and haters, I, am the author of a blog novel about a Starbucks-like company undergoing a mega-expansion in Europe while anti-Americanism thrives.

The heroine is the chief of global communications strategy and can shed much light on this type of discussion.

And since I don’t like to promote myself without giving a link to someone else nay I also recommend Starbucks Gossip.

17

reuben 08.23.04 at 7:42 pm

David

I agree with you that Starbuck’s has made drinking coffee in the US a much more pleasant experience, but I think that most of the nervousness is about the fact that their economic power may enable them to crush or permanently alter cafe cultures in other countries (where they didn’t create the industry), to the detriment of a great many people in those countries.

(And before the usual suspects start bleating, just because you win doesn’t mean you’re what the people actually want. It may just mean that you have bigger pockets, and thus the ability to drive up rents, control supply, etc. There are plenty of crowded cafes in Europe that could still be run out of business, even while staying crowded.)

18

David Sucher 08.23.04 at 7:53 pm

“There are plenty of crowded cafes in Europe that could still be run out of business, even while staying crowded.”

How does that work? The only possible explanation would be extremely poor management, which you cannot lay on S’bucks.

There are many many examples in Seattke (of all places!) of an independednt thriving in the literal shadow of a Starbucks. I do not believe the fears (and can anyone cite a specific?) that Starbucks can drive otherwise top-notch competition out of business.

Look folks, the bottom line is that Starbucks is not sucessful because it is big. Starbucks is big because it sucessfully meets a market demand…and fairly interestingly, a market demand which it has had a large part in creating.

19

Eliza Dashwood 08.23.04 at 7:55 pm

Just one problem Reuben, if Starbucks puts so many people out of business, why are there so many more cafés — both chain and independent — than there ever were before?

The pie has gotten way bigger not just Starbucks’ slice.

20

Eliza Dashwood 08.23.04 at 8:03 pm

Why Euros go to SBUX

1) Ongoing love/hate relationship with the U.S. and things American

2) Takeout. No one else in Europe does lattes and cappucinos to go.

3) No waiters. You order your coffee, you pick it up, you sit down. If you want another one, you get it. If you don’t, you leave. No waving down a waitress who’d rather be waiting for her close-up. And very best of all, no attitude from some older guy whose surly behaviour you’re supposed to find charming even though his hostility level is approaching that of a serial killer.

from a blog novel in progress. You can reach her at blognovelist@hotmail.com

21

dsquared 08.23.04 at 8:10 pm

I swear black blue and blind that there have been coffee shops, milk bars and indeed, cappucino makers the length and breadth of Britain ever since the Italians arrived here. The Morecambe and Wise film “Intelligence Men” has Eric as the proprietor of a “frothy coffee shop” in Blackburn in the 1960s.

22

Eliza Dashwood 08.23.04 at 8:16 pm

coffee bars were a big trend in London in the fifties and sixties. But then, like black turtle necks, they went out of style.

The ONLY places you could decent coffee in London in the seventies and eighties were Italian joints — that’s it, that’s all.

The rest of the coffee in the UK was undrinkable. You took a sip, spat it out and asked what you had just drunk.

HOnest.

23

reuben 08.23.04 at 8:25 pm

Eliza

why are there so many more cafés — both chain and independent — than there ever were before?

Do you have a cite for that? I genuinely don’t know, but when Starbucks moves into a European city, does the number of cafes skyrocket?

Takeout. No one else in Europe does lattes and cappucinos to go.

Then I’ve been getting ripped off, because almost every singe day, I give someone with a European accent money, and he gives me a latte or cappucino. As I’m in Merry Olde England, which is part of Europe and which I now know doesn’t serve these drinks to go, I can only assume that I must have been drinking tea with a bit of yoghurt on top.

24

David Sucher 08.23.04 at 8:27 pm

Maybe so, dsquared, as with anything, a lot of judgments are impressionistic and I am sure that there was somewhere in England in 1992 where one could find a decent cup of coffee. But I looked and looked and I could find few only a bare few. I remember (then) distinctly thinking to myself that S’bucks could clean up in London and Paris.

25

Eliza Dashwood 08.23.04 at 8:39 pm

Well, let’s see, within five blocks of my home in Canada, I have seven independents and on SBUX. Five years ago it was four independents and no SBUX.

So, let me ask you Reuben, where is it you live that SBUX is wiping out independents and the coffee shop population is dwindling?

As for Europe, where I used to live, there are still too few SBUX there to put anyone out of business. But I just don’t see any reason to believe that SBUX would cause mass coffee shop closures because, despite rumours and myths, it hasn’t caused them anywhere else.

26

John Quiggin 08.23.04 at 8:56 pm

David, I considered (but didn’t answer) the point you raise, in this older piece, where I asked

Is Starbucks to coffee as Oprah Winfrey is to literature, a potential bridge from instant to the real thing. Or is Starbucks to coffee as Microsoft is to software, a ‘good enough’ monopolist that kills the competition and closes off the chance of anthing better?

In view of the huge growth of cafe culture in Australia, which is usually about a decade ahead of the US and UK in such things, I think the cafe sector was bound to expand. The scale economies in the US favoured a chain-based expansion and gave advantages to an aggressive first-mover.

27

Eliza Dashwood 08.23.04 at 9:03 pm

Just what are the “such things” in which Oz is usually a decade ahead of the US and UK?

28

reuben 08.23.04 at 9:15 pm

Eliza and David

I didn’t say that cafes were being crushed, I said that “I think that most of the nervousness is about the fact that their economic power may enable them to crush or permanently alter cafe cultures in other countries.” Lots of Europeans do feel nervous about this. Maybe they’re all idiots, and deserve to have a frappucinos poured into their lederhosen and accordians; I don’t know. You appear to believe that this is the case, but I would argue that when talking about European cafe culture, it’s possible that analogies to Seattle and Canada don’t cover all the possibilities. Maybe that makes me a madman.

And Eliza, you said that wherever Starbucks appear, independent cafes flourish. I asked you to back that statement up with regards to Europe. You cited your hometown in that well-known European nation of Canada. And yes, I know that you used to live in Europe, but that was, by your own admission, before there were many Starbucks. Like a great many people, I’m curious what the effect of more Starbucks will be. (I’m even more curious about your assertion that countries in Europe don’t serve cappucinos and lattes to go, but we’ll leave that for another time.)

Please try to avoid framing this as a “hate Starbucks” / “love Starbucks” issue. At least in my case, it’s one in which I’m interested in the daily fabric of economic and social life where I live and travel, and what effect an international chain will have on it all.

29

David Sucher 08.23.04 at 9:29 pm

From my own experience, tenants who mismanage their own business may often use any plausible excuse to explain their failure; and one that sounds good is to blame Starbucks, the landlord etc etc

30

Scott Martens 08.23.04 at 9:30 pm

Des, well, they’ve also got a Quick in Casablanca, another in Dubai and I gather they’re going to open one in Andorra.

Quick is pretty widespead in Dutch and German speaking Belgium, but I guess otherwise you’re right, its a francophone firm. I miss Hardee’s. And Carl’s Jr. I could kill for a Western Burger and a poutine.

31

David Sucher 08.23.04 at 9:36 pm

In any case and more globally, from my own experience, tenants who mismanage their own business may often use any plausible excuse to explain their failure; and one that sounds good is to blame some big entity like Starbucks, the landlord etc etc.

Yes there are instances in which the little enterprise cannot even remotely compete with the big chain. But I do not think that personal and food services are parts of the economy where the large entity has all the cards.

32

Eliza Dashwood 08.23.04 at 9:45 pm

Hello Reuben,

First takeout coffee. Yes, that was a sweeping generalization. However when I lived in Europe it was extremely difficult to get takeout. Now maybe that’s changed and it’s easier but I just don’t believe the availability of takeout coffee is anything near what it is here in NorAm thanks largely to SBUX.

Now, true, I did live in Europe in the pre-SBUX era so I don’t know the innermost feelings of Euros about the coming of Starbucks.

So for the sake of discussion, I compare to what I’ve heard said about SBUX in Noram cities.

Many people believe that SBUX wipes out the competition. This is partly because there have indeed been some very nasty and highly publicized cases where SBUX did indeed prey upon the competition and wipe them out. I would not deny that.

It is also partly because many people are preprogrammed to believe that when a chain store (selling whatever) arrives in town the effects will be nothing but bad.

There may indeed be areas in which the overall effect of chains is negative however the coffee business is certainly is not one of them. As David points out, cafe culture has boomed with the coming of Starbucks. The big picture is there are far more coffee shops and independents than ever. This is the case for just about every major NorAm city and cannot be dismissed as just David’s and my anecdotal evidence.

Now it must also be said that unlike Europe, most NOrAm cities never had much of a café culture before so people didn’t fear its demise. My point again would be that Starbucks is not going to replace popular established cafes. This doesn’t mean that no café in Europe will ever close. Yes, of course they will, for the same reasons cafés have always closed. BUt my prediction is Starbucks will just become another source of coffee.

I don’t think there’s anyone who wants to see the world become one homogenous glob(e). But I’m often disturbed that so many of the people who advocate against chains often seem to want to deny others the conveniences and pleasures they themselves enjoy.

33

Globule 08.23.04 at 9:56 pm

“And best of all, no attitude from some older guy whose surly behavior you’re supposed to find charming….”

Strange. Around here (in Berkeley, CA) it’s the Starbucks employees who have the attitude, not to mention the ridiculously overpriced and overrated coffee. Peet’s is a hundred times better in all respects.

34

reuben 08.23.04 at 10:15 pm

Eliza –

I agree that Starbucks has been a boon to American cafe culture – I actually said pretty much that in my first post. As David said, it really did create an industry (in North America) – one that many people get a great deal of pleasure out of. Kudos for that.

Re Europe, I hope your prediction proves true. It’s also possible that combination of Starbuck’s massive buying power and public pressure in favour of fairtrade could combine to change the coffee production industry for the better.

On that note, fairtrade coffee is increasingly available in UK coffeeshops – I consider this to be a fabulous development. How about in NA?

Cheers

35

Mark Kaplan 08.23.04 at 10:44 pm

Eliza,

‘My point again would be that Starbucks is not going to replace popular established cafes’

You offer little evidence for this assertion. Starbucks typically push out small cafes by offering larger rents to the landlord. This has happened to four – relatively popular – cafes in my local area. The appearance of these 4 branches, therefore, is determined not simply by local demand but by the economic logic of monopoly. Whereas before, I had a choice of 4 different environments and four different individual coffees, this has been eliminated by a democratically unaccountable corporation. I now have four different instantiations of the same impersonal template. Fantastic.

36

marek 08.24.04 at 12:03 am

Why Euros go to SBUX:

1) Ongoing love/hate relationship with the U.S. and things American

This seems to be one more unsubstantiated assertion about the European coffee market. I suspect the proportion of Starbuck’s customers who give a moment’s thought to the nationality of its holding company is vanishingly small. The fact that a few anti-globalisation protesters occasionally like to smash their windows is completely irrelevant to understanding the motives of people who are their customers.

People go to Starbucks to buy coffee. The one advantage it has – in common with other chains – is that it reduces search costs: the coffee may not be the greatest, but you can be confident that it will be mediocre in pretty much the same way as every other branch.

37

Eliza Dashwood 08.24.04 at 12:33 am

Reuben,

Fairtrade coffee is indeed more available than ever in NorAm although it seems to me that I recently read an article saying sales were dropping in Europe for some reason. I”ll try to dig it up.

Mark Kaplan,
what can I say other than ask you where you live and what are the cafés that went out of business.

Everywhere I look in every city I visit there are more coffee shops when ever. And when SBUX does do something nasty, it’s a cause celebre and all over the press. Let’s name names please.

Of course, I can’t predict exactly what effect the presence of Starbucks will have in Europe but then neither can you. We’re both making predictions based on what we’ve seen in the locations we know. In five years, we’ll know who was right.

Marek,

Sorry, people buy coffee and go to a particular café for lots of reasons.

That quote is from my blog novel about a Starbucks-like corporation and should be read in its fictional context.

Cheers to you all,

ED

38

yabonn 08.24.04 at 12:36 am

Lots of Europeans do feel nervous about this.

I wish i had saved the us coverage of the opening of the first starbuck in paris. It was during the irak spat iirc, and boy, were the french supposed to react.

There would be antiamericanism. There, would the rusty cogs of the decaying old europe economies fail to adapt to global capitalism. There would be mournings on the fading of the art de vivre. There would be the pitchfork and torches bearing parisian street. There would be all that, and there would be dragons.

Here, the news was “a coffe opens in paris”. To which, of course, no one would give one quarter of a shrug.

… Till now, zero effect on the lifestyle, and no one cares, one way or another, about that brand.

Developping… :)

39

Rex 08.24.04 at 1:26 am

There sems to be an awful lot of anxiety here over the simple cup of coffee.

Personally I drink tea, and I think you should try it. It will calm your nerves.

40

David Sucher 08.24.04 at 3:45 am

Mark Kaplan, “Starbucks typically push out small cafes by offering larger rents to the landlord.”

Can you offer an example? A specific, please.

I would not doubt that Starbucks can afford to pay more rent; but that’s because they expect higher sales and they know how to analyze a site. They do indeed have an advantage: propietary information, trade secrets, on markets from their thousands of stores which allows them to make very very asture judgments.

Extremists might suggest that “information wants to be free” and that S’bux has no right to trade secrets. But I don’t think — thank god and common sense — that we are ready for that one yet.

41

Nabakov 08.24.04 at 4:16 am

“Nabakov’s obviously a young un if he thinks it was always easy to get a decent cup of coffee.”

I was talking about the world, not this NorAm place which you appear to think sets the boundaries for discourse on access to decent coffee.

And like dsquared and reuben, I never had any problems laying my lips on or taking away a decent brew in London, or even in Norwich in the 70s(!??!). Guess we just know more cool places than you.

“Just what are the “such things” in which Oz is usually a decade ahead of the US and UK?”

Since the early 80’s, a lifestyle with easy and affordable access to high quality food and drink, available in a wide range of settings.

Also this “great blog novel” you keep touting strikes me at this stage as just another heavy-handed polemic about can-do USA business acumen and common sense vs those decadent Frogs and wiener liberals, complete with Dorothy Dixer comments.

I do hope it will evolve into something more substantial than “Diary of a Parochial Marketing Exec”, for your sakes, if not ours.

42

Martin Pike 08.24.04 at 5:32 am

First posted by me on Quiggan, repeated here for mr Sucher…

In my old nook of London I didn’t mind the local starbucks. There was only one of it, and it was one of maybe only 3 decent cafes in the area. I went a couple of times a week.

Unfortunately it was struggling a bit, and so kept closing the “lounge” section I liked, or even shut down early some evenings.

Suddenly 2 more starbucks appeared, within 500m of the first. Why? All 3 got a medium number of people, but there were a couple of more popular cafes. Despite this I am told one of those has now shut, and the starbucks empire in the area has expanded to 5. Why?

Along the same lines, Lygon street in Melbourne has some of the best coffee in the world, and some of the highest real estate prices in my current city, I am sure. A starbucks has opened in the middle of the most competitive strip. I peer in it regularly (I’d sooner bite off my own penis and wash it down with retsina than go in..) and it has never been overly busy.

Why is it still open? How do these places manage to hold on and expand when similar customer numbers would put an ordinary mum n dad place straight out of business.

The simplistic explanation of consumer choice, apart from being affronted by the monopolies that eventuate, is obviously not adequate to explain the phenomenon.

To me it appears no individual startup can ever compete fairly in such a situation.

43

momo 08.24.04 at 8:56 am

Eliza, I know Italy very well, and I’m not sure “SBUX” would do “just fine”, not because of some convenient explanation like “antiamericanism” (… has the definition become so loose it now includes not worshipping at the altar of every single American company, no matter the quality of what they produce? well, if anything, Italians have always been total suckers for American brands – usually, if there is something to them, but not necessarily…). It’s probably be because no one would feel the need to drink diluted coffee that costs ten times as much as what you get in any bar, café, restaurant, latteria and ice cream place at any corner, and does not taste as good. Simple as that. If Starbucks really think it’d be smart for them open in Italy, what’s taking so long? I guess they’d need to push the novelty factor, and the brand, but very few people in Italy actually know what Starbucks is, unless they’ve been to the US. It’s nowhere as known as MacDonalds, which has had a massive brand identity, a novelty appeal, instantly recognisable American products, and a rather smart strategy of meeting local preferences for food and decor (and they actually bought off existing local fast food chains), as well as getting their food from local producers, and even so, it’s still a once-in-a-while experience for most people. If Starbucks were half as smart, they’d have to get their coffee from local well-known suppliers (Lavazza, Illy) instead of their own. They’d have to significantly lower their prices which are insane by Italian standards. They’d have to stick to the more touristy areas. They’d have to take on a very specific target. Also, they would have to face a few hassles with the unions and labour laws and minimum wage standards and all, so I’m not sure it would be convenient for them. Or maybe they’ll surpass all their most amazing expectations and open right in the heart of Naples and be an astounding success and turn all neapolitans into Grande Latte fans! It’d be a lot of fun to see that.

Personally, I don’t care either way, nothing short of nuclear warfare could dismantle the preference for the small local bars and typical way of making and serving coffee & the like, in Italy or elsewhere in Europe where there is a strong local tradition. Starbucks opened in Vienna and Paris, like, big deal. It sure hasn’t changed the presence of cafés offering their own much better coffee, chocolate, cakes, etc. what with many of them being around for one or two centuries and serving specialties that you certainly can’t get in a Starbucks.

Makes me wonder, do people writing on weblogs to advertise for this brand in such enthusiastic ways get paid? Or do they do it out of sheer passion?

44

Nabakov 08.24.04 at 10:51 am

“Makes me wonder, do people writing on weblogs to advertise for this brand in such enthusiastic ways get paid? Or do they do it out of sheer passion”

Well Momo, if you visit Eliza’s “greatblognovel” site, it’s hard not to hear the whisper of the wind rustling the astroturf, Seattle-style.

45

kate 08.24.04 at 10:51 am

Okay. I live in Belfast. It’s Europe but in no ways a very cosmopolitan part of Europe. We got our first Starbuck’s about two months ago. Now, have a second, with a third planned.

I came here in 1992. No, you couldn’t drink the coffee. You couldn’t drink the cofee in the little bakery/cafes. You couldn’t drink the coffee in people’s houses. (I’ve revolutionised my work by refusing to drink instant coffee and bringing in a filter coffee machine).

We didn’t get coffee bars until after the Good Friday (Belfast) Agreement. A few popped up, in the city centre, by the university, along trendier streets. Now, you can get a silly designer coffees with whipped cream and chocolate at the grocery stores, at various branches of the local chains and even from little carts. It wasn’t always like this.

Of course it didn’t take Starbucks opening to create the market. But I think the fact that Starbucks existed and showed a way of doing business, influenced what happened here. People were exposed to the Starbucks idea in London, in New York, in Noram. Coffee is better. I’d still go out of my way for a Peet’s though.

46

Eliza Dashwood 08.24.04 at 12:11 pm

Momo,, personally I’m not a Starbucks girl myself. their lattes are way too weak for me and I don’t like paying extra for a double shot. I go to the indies far more often.

What interests me about SBUX is the false conventional wisdom that surrounds its every move.

It’s interesting too that while you’re maintaing that Starbucks coffee is so bad it will never shut down european cafes others on this thread are ringing their hands in anguish about how Starbucks might destroy the locals.

Nabakov, I disagree with everything you said but thanks for visiting the blog novel and for your feedback.

As they say in France when SBUX arrives ‘Vive la Difference!’

47

Nabakov 08.24.04 at 12:40 pm

ED,

“As they say in France when SBUX arrives ‘Vive la Difference!’”

Actually they said “So fcukin’ what”.

And never feedback, you need talent. And a decent cup of coffee.

48

reuben 08.24.04 at 12:49 pm

Nabakov

At what point will you realise that unwarranted incivility to those you disagree with doesn’t make you more righteous? It just makes you feel like a tough guy (but look like a putz).

Try not to be a cliche; you hurt the causes you profess to support.

Cheers

49

Eliza Dashwood 08.24.04 at 12:57 pm

Oh, don’t worry about it Reuben. I’m sooo at polar odds with Nabakov on everything, that I consider his personal attacks kind of a badge of honour.

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Eliza Dashwood 08.24.04 at 12:59 pm

Oh, don’t worry about it Reuben.

I’m not the weep-in-my-latte, fainthearted type.

Honest!

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Nabakov 08.24.04 at 1:51 pm

OK, it’s clear black-humoured Aus/Brit chaffing doesn’t translate well online to the lower 48.

But beyond that, I can handle perky or pompous, but not both together.

Kinda like having a double decaf orange, overfoamed friggalatto pushed at yer when all you wanted was a short black.

But hey, if yer wheel yer barrow out and start touting, then be prepared to accept some backchat from the punters.

Besides I like a good barney.

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mark K. 08.24.04 at 2:57 pm

Eliza,

re “what can I say other than ask you where you live and what are the cafés that went out of business”

I’m not sure that citing four (to you) random foreign names would do anything to advance the discussion, and to be frank I’m a little curious as to why you request these.

May I remind you also that the original post did not constitute an attack on Starbucks, making the direction taken by the subsequent discussion somewhat revealing. The eagerness to ‘defend’ what in any case was not been attacked would seem to smack of paranoia.

You might also care to, if you have the time or inclination, to explain what you mean by ‘anti-Americanism’ in your blog novel, if indeed you mean anything (it is, after all a work of fiction).

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Eliza Dashwood 08.24.04 at 2:59 pm

Hey Nabakov, you’re now officially part of the blog novel with your own place in my comments section

Given as yer wheeled yer barrow out, I don’t expect any objections.

also kind of like the allitration of perky, pompous and parochial!

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Eliza Dashwood 08.24.04 at 4:04 pm

Mark K, I asked for the names because so much that is said about SBUX has the whiff of urban myth about it.

“I know four cafés that have closed but I can’t name them” resembles that old chestnut “it happened to a friend of a friend.I swear it.”

As many people here have stated, café culture –independent and chain — is booming. If you can’t tell us where you live that the opposite is true, well so be it.

As for me being paranoid because I’ve leapt to STarbucks’ defence when it didn’t need defending, well I must respectfully disagree about the message inherent in the initial post.

And I’m not paranoid. I picked a Starbucks-like company for my blog novel because I see coffee as a great metaphor for a lot of what’s happening in the world — fair trade, globalization, branding, culture wars, chattering class snobbery, false conventional wisdom, etc. I have no connection to the coffee business other than reading about it.

I’ve spent a lot of time posting here to try and get hits for my blog, but now it’s time to pack it in and have a coffee.

Ciao all

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Nabakov 08.24.04 at 4:19 pm

And it’s not just the excess of perkiness and pomposity that shows you up as parochial, it’s also the lack of blog politesse.

By all means lift my remarks for your blog (that’s why I shoot my mouth off online), but placing them as comments in a thread when they weren’t posted there to begin with smells of branchstacking for starters (Me Mum didn’t raise me to be no Dorothy Dixer), not mention the whole out of context thing.

And what makes you think it’s “Mr” Nabakov?

Also the correct spelling is “alliteration”.

Keep this up and I won’t be the only person here reminded of Tracy Flick in “Election”.

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momo 08.24.04 at 4:28 pm

Eliza – It’s interesting too that while you’re maintaing that Starbucks coffee is so bad it will never shut down european cafes others on this thread are ringing their hands in anguish about how Starbucks might destroy the locals.

They’re both sides of the same coin, Eliza, if you don’t get it, I’m afraid I can’t help you. We’re on different planets here, as mentalities and realities go.

McDonalds hasn’t “destroyed the locals” either, in Italy, or France, or Spain, or Greek islands, or similar places where McDonalds fits in just like a punch in the eye. Even in the fast food field alone, there’s still a lot of other options there. That’s not the same as saying its business practices and food “culture” (ouch – I’m using this term just for convenience) are a Very Good Thing.

Or that homogeneous global brands are preferable to local businesses that are rooted in the place they operate, especially when these places happen to have a very solid local typical tradition in those fields, which is very successful even without being so Gigantically Huge & Mega Global Massive, in fact, precisely because of that.

But Gigantically Huge & Mega Global Massive brands have a lot more paved roads in front of them.

If McDonalds wanted, they could buy ALL of the other fast food joints in any given medium-sized European country. They have the financial resources to do that. Of course they’d have no _interest_ in doing that.

But it’s not contradictory to acknowledge that’d be impossible, while at the same time being critical of the way they operate and the homogenising effect they have.

As they say in France when SBUX arrives ‘Vive la Difference!’

Yup, that’s juuust what the French said when SBUX arrived to town!

Thanks for the laugh, and good luck with the advertising venture :)

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Ray 08.24.04 at 5:06 pm

“It’s interesting too that while you’re maintaing that Starbucks coffee is so bad it will never shut down european cafes others on this thread are ringing their hands in anguish about how Starbucks might destroy the locals.”

Its possible for Starbucks to be worse than the alternatives and still drive competitors out of business, you know. Big companies have deep pockets and can engage in predatory behaviour.

But I’m amazed that anyone see’s the original post as an attack on Starbucks. Its an attack on ignorance and parochialism, if anything.

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MArk Kaplan 08.24.04 at 5:08 pm

‘Mark K, I asked for the names because so much that is said about SBUX has the whiff of urban myth about it.

“I know four cafés that have closed but I can’t name them” resembles that old chestnut “it happened to a friend of a friend.I swear it.”’

As I thought, accusing fellow posters of inventing things doesn’t do you or your argument any credit does it? However, I now see that your argument was in any case a disguised advert for yourself and therefore of little inherent value (I’m sure this would serve as a ‘metaphor’ for lots of things too, no?)

Incidentally, I never said anything to the effect of ‘I can’t name them..” I merely asked why you wanted me to do so, and I did this in order to drag your insidious accusation of lying (to put it bluntly) out into the open.

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Eliza Dashwood 08.24.04 at 5:29 pm

I lied/misspoke/promised more than I could deliver. I couldn’t resist coming back.

Nabakov — I’ve updated the comments section at my blog novel to take your concerns into account.

I’m a big Rese (whoops–typo, dyslexia or spelling parochialism??) fan myself.

Oh yeah, and isn’t just more than a little parocial to claim the Ozzies invented the new foodieism just because you happened to have your first Californian curry on Bondi Beach? In any case I must have selpt through the day everyone agreed food trends begin in Oz and then move to the UK and US 10 years later.

Momo, Mcdonald’s can’t buy and sell much right now. The company’s in big trouble except in France, where in a case of what the Economist magazine calls
delicious irony, it’s going gangbusters.

Mark K., I’m not accusing you of lying just being subject to preconceived notions.

And I didn’t think I was advertising, just harnessing the power of a giant blog like CT to promote my little Indie.

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Nabakov 08.24.04 at 5:36 pm

Eliza babe,

As my comments you’ve lifted for “greatblognovel” are far more pungent and well crafted than…

““You horrible man,” she yelled. “You sluttish woman. You two should know you can’t do this to me. I will have my revenge.””

…can I have half whatever royalties may accrue to this half-arsed project?

Failing that, can I enter you in the 2005 Bulmer-Lytton Competition? In the romantic novel category, natch.

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Eliza Dashwood 08.24.04 at 5:47 pm

Nab, you brute,

Of course, I’ll make a royalties deal with you, but you’ll have to pay me some cash up front.

And enter us in the contest by all means. U know what they say — any publicity is good publicity.

Yours,

Eliza

ps my daughter thinks your posts are really mean. she must have inherited my appreciation for the mot juste.

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Nabakov 08.24.04 at 6:17 pm

“she must have inherited my appreciation for the mot juste.”

So go buy her one at yer local Startfarts.

And have an Esprit d’escalier with extra raspberries while yer at it.

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momo 08.24.04 at 6:21 pm

Eliza, you’re so funny, really.

Let’s see. McDonalds has thousands of outlets worldwide and is sponsoring the Olympics.

The local bar that makes really nice sandwiches and salads as well as drinks, isn’t. Not even sponsoring the local school dads football team.

I don’t know how exactly McDonalds is supposed to be “in big trouble” seen as it’s buying more and more outlets around the world. Would that be similar to Microsoft being “in big trouble”? I want me some of that big trouble too, thanks. With latte.

The point was the same that Mark put like this: “Its possible for Starbucks to be worse than the alternatives and still drive competitors out of business, you know. Big companies have deep pockets and can engage in predatory behaviour.”

I wish I was a Starbucks executive, Eliza, not for the money, but just to reward your amazing efforts. One mention of Starbucks and you were here before you could even understand what the point of the discussion actually was! Such skills deserve some more recognition than a place on blogspot.

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David Sucher 08.24.04 at 6:49 pm

Question for the day: Is it an urban myth that Starbucks drives competitors out of business?

Has anyone seen any sort of study on this matter?

I don’t doubt that there are examples of merchants who have ceased business when S’bux came to their neighborhood and who have claimed that they couldn’t compete. I know one myself. But is even that claim a wide-spread phenomenon? (Not even getting into whether it is credible or not.)

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mark Kaplan 08.24.04 at 9:08 pm

‘Mark K., I’m not accusing you of lying just being subject to preconceived notions’

‘I operate by clear light of reason, you according to preconceived notions': few rhetorical gestures are quite as stale – or preconceived – as this one Eliza.

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novakant 08.24.04 at 9:27 pm

Contrary to its name Cafe Latte isn’t coffee at all, it’s a pure excuse like Prosecco. A proper coffee is a double espresso accompanied by a cigarette and a little biscuit – a non-diluted cappucino might also do the trick. And I don’t know what they serve at SBUX but it sure isn’t coffee either – Cafe Nero OTHO knows how to make a decent coffee.

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novakant 08.24.04 at 9:32 pm

Cafe Latte, contrary to its name, isn’t coffee at all – it’s a poor excuse like Prosecco. A good coffee means a double espresso or a non-diluted cappucino accompanied by a cigarette and a little biscuit. And I don’t know what they serve at SBUX – but it sure doesn’t qualify as coffee, I suggest sticking to Cafe Nero while in the UK.

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novakant 08.24.04 at 9:35 pm

and to make matters worse:

sorry for the double post, too much coffee I guess

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John Quiggin 08.24.04 at 9:59 pm

novakant, of course you’re right that latte isn’t coffee (its the Cold Duckof the 21st century

But the cigarette is a mistake. The double espresso should work its magic without the interference of nicotine.

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Eliza Dashwood 08.24.04 at 10:41 pm

Well momo, glad I could bring a few laughs into your life. Now, allow me to bring a few facts as well.

You seem to think that McDonald’s can’t be having trouble because it’s sponsoring the Olympics and has thousands of outlets worldwide. Ever heard the expression, the bigger they are the harder they fall?

As for your local sandwich store not sponsoring the local Dads’ football team, I’m not sure what your point is. That they can’t afford it or can’t be bothered.

For the details on McDo’s problems, this Time magazine article is a bit old but provides a good summary.

http://www.time.com/time/business/printout/0,8816,354778,00.html

Basically it’s the fact that they’re not serving what people want to eat in the manner they want to it. And yep, that does tend to get companies in trouble be they little Mom’n’Pop shops or mega-conglomerates.

Now to address a point that you and others have made — that one can serve a second-rate product and put little guys who serve a top-rate product out of business.

But it’s rather hard momo to argue that point with regard to coffee in Europe while at the same time that maintaining, as you do above, that “nothing short of nuclear warfare could dismantle the preference for the small local bars and typical way of making and serving coffee & the like, in Italy or elsewhere in Europe where there is a strong local tradition.”

I mean are you implying that Starbucks has nukes?

The idea that the inferior big manufacturer will shut down the superior little one is certainly a powerful trope, but, as David Sucher asks above, is it reality based?

We have way more varieties of food — prepared and fresh — than we ever had. I certainly know of mediocre small stores that have been shut down by mediocre chains, but I don’t know of one superior store that has been shut down by a mediocre chain.

The only example I can think of is tasteless tomatoes which somehow seemed to take over from good tomatoes for decades but even that seems to have reversed itself with the advent of the grape tomato.

And momo, it’s always a cheap shot to tell someone who disagrees with you that they don’t understand, the implication being if they were smart enough to understand they would surely agree.

YOu’re coming though loud and clear. I’m just not in agreement.

And if you don’t mind I’ll cull your quote too.

“Such skills deserve some more recognition than a place on blogspot.”

It will look great on my blog.

a la prochaine

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marek 08.24.04 at 11:14 pm

Eliza

Sorry, people buy coffee and go to a particular café for lots of reasons.

Of course they do. But it was you, not I (or anyone else) who advanced a closed set of three reasons, the first of which was to do with love or hatred (are you clear which?) for things American. I live in a big European city where lots of people buy coffee from Starbucks, lots of people buy it from other places and many do both. I have been in many conversations about where to go for coffee; never once has anybody suggested that the nationality of final ownership of the establishment concerned had the slightest weight on the decision.
You, on the other hand, put it as the first of your three reasons. If you wish to retreat behind the shroud of your fiction, so be it, the truth in your fiction can be anything you want it to be. But since you have chosen to comment in a thread about Starbucks, it would be interesting to know if you have a glimmer of evidence behind you very forceful assertion.

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Hank 08.24.04 at 11:28 pm

John,

You claim that: A Hollywood movie can easily cost $100 million to make but once it’s made the cost of showing it is trivial. That is dead wrong. Everyone familiar with the movie business knows that the cost of distributing, marketing and exhibiting a film is often greater than the actual cost of producing it, in some cases by a factor of 150%. The per-movie average amount of money the MPAA’s member studios paid in production costs climbed to $63.8 million in 2003, and the average cost of marketing a film went up to $39 million. And that does not include the cost of exhibition. And smaller films are hardly exempt. Recent examples: Michael Moore’s “Fahrenheit 9/11″ cost $6 million to produce and $10 million to market; “White Chicks” cost $30 million to make and $37 million to market; “Dodgeball” cost $20 million to make and $30 million to market. One of the reasons European movies rarely penetrate the American market these days is the high cost of distributing, marketing and exhibiting such films relative to potential profits.

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John Quiggin 08.25.04 at 12:03 am

Hank, thanks for this point. I’ll re-examine the issue when (if) I rewrite.

It’s not immediately clear how this affects my argument. The costs of marketing a film in the US are, for my purposes, fixed costs like the costs of production. So what matters is the cost of marketing and distribution outside the US. Do you have any info on this?

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Eliza Dashwood 08.25.04 at 12:12 am

Marek, that was a fictional character talking not me.

I, the real me, however does think one of the reasons people initially go to a Starbucks is because of its fame and the cutiosity such fame provokes. People want to try SBUX and see if it’s all it’s cracked up to be.

I also happen to think that Starbucks’ fame is inseperably intertwined with its Americanness and people’s impression of what an American brand will offer them.

This doesn’t mean they say let’s go to SBUX because it’s American but rather they might want to go to SBUX because they’ve seen all those recent Hollywood movies where everyone was drinking SBUX so they want to try it.

Of course, after that first visit, lots of people just go to SBUX cuz it’s convenient.

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Hank 08.25.04 at 3:17 am

John,

Even without consulting the data, I can assure you that the figures for distribution, marketing and exhibition of films outside the U.S. (I am actually in Canada; the Canadian market is often considered part of the “domestic” market) are similar (relatively speaking) in most developed countries, though they may vary somewhat from one “territory” to another. The tendency is for studio films to open simultaneously in as many (North American) cities as possible (“day and date”) so as to maximize the bang for the advertising buck. But, for popular films, it also means making several thousand prints at $2000-$3000 each since the opening weekend is crucial. This process is then repeated in Europe and other “territories”. Take Europe. The prints are ready to be shipped, but (outside the U.K.) the films must be dubbed into each local language. And local advertising campaigns must be prepared. These expenses are anything but “trivial”.

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John Quiggin 08.25.04 at 5:28 am

Thanks for this, Hank. Dubbing (as well as alternatives such as subtitling or showing films in English only) is an issue that certainly deserves more attention in a rewrite.

I assume from what you say that the prints can be treated as a fixed cost; that is, prints made for the initial North American release are reused overseas. Is that correct?

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momo 08.25.04 at 8:43 am

“I mean are you implying that Starbucks has nukes?”

That might explain the taste. And the prices.

Eliza, the part about you not “understanding” is not a cheap shot, it’s that you’re really not grasping the nature of the criticism about the impact of big multinational brands on typical local lifestyles and habits esp. in food and drink.

John Quiggin’s post was about a lot more than Starbucks, clearly if that’s all you latched on to, you’re not getting the picture!

And when talking of Italy, I happen to be half-Italian and be living in Italy. It is not a contradiction to simply observe that there are local specialties and associated ways of serving and consuming things like coffee that will certainly not be eradicated, and at the same time, not consider it a good thing that some mega corporation is able to buy their way into a market that they can create in an entirely artificial way, just because they have the resources to. I don’t have a Darwinist vision of business, or life, so to me bigger is not automaticallly better – nor is small automatically better, I’m not a fanatical anti-globalist. It’s not even a matter of local vs. global to me, I don’t care where a company is from as long as there is quality and a _real_ market and good business practices – something like IKEA is great because it can offer good and relatively cheap products that can integrate perfectly in any market, and it does satisfy a demand; American TV series can be far better than locally produced ones; ditto for computers and software, there can be a million examples. But if we’re talking selling Starbucks coffee in Italy, as the Italians would say, it’d be like selling icicles in the North Pole (it doesn’t translate well…) – SURELY a big enough corporation would be able to do just that, too, but it’d be _just because they can_, not because there is a real demand. I’m not too worried about that style of business but I’m not particularly fond of it either. I guess other people who commented are more concerned about the effect of SBUX within the US – I don’t have the same concern about Italy or Europe at large, in this specific regard to coffee and food, but there’s more ways in which a company can affect a market than “driving the locals out of business”. I don’t have to _like_ McDonalds or Starbucks OR ELSE be terrified they might close down every other business in their range, you know? The issues about “globalization and soft power” as it was put above and in the linked posts are not reduced to such ridiculous extremes. That is what you’re not understanding, amongst other things.

“And if you don’t mind I’ll cull your quote too.”

Actually, I do mind, so, please don’t, ok? Thanks. I’m sure you have lots of great ideas of your own creation without having to resort to lifting comments from other blogs to fill your own. Again, congratulations for the creative spamming!

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Eliza Dashwood 08.25.04 at 12:28 pm

momo, the “not grapsing” stuff is so tired, so patronizing and so passive aggressive.

I grasp it. I grasp it. I focussed exclusively on Starbucks becuse Starbucks is what interests me personally not because of my inability to grasp the big picture. That’s it, that’s all.

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momo 08.25.04 at 12:57 pm

Whatever suits you, Eliza, but regardless of your business interests, if you don’t mind more “patronising”, a.k.a. discussion, the whole point of quoting this anecdote…

Speaking of a unified world, one of my American students confided in me after a trip abroad “they don’t seem to have a cafe culture in Italy, do they?” ‘What?,” I stammered. ‘Well, I didn’t see a single Starbucks all the time I was there.”

… is not that it has to do with Starbucks, or coffee, could have been any other brand or market.

As Jim Morrison might have said, ‘I’ve been steeped in simulacra so damn long, it sure looks like the real to me.”

I’m sure you grasped all that already, it just didn’t come across amidst all the brand praise and blog plugging, that’s all. That’s the perils of marketing to the wrong target, I guess.

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Hank 08.25.04 at 2:19 pm

John,

Yes and no. If they (the prints/films) can be shown entirely in their English versions, their original cost will have already been fixed. All that would be needed would be to transport the cans to the theatres. (Marketing/promotion/advertising, however, is always a territory by territory affair, and is an added cost even in the U.K. and Australia.) But even this presupposes a certain level of exhibiting (visual and aural) technology, which is not always the case in smaller centres. So special (lower tech) prints may have to be made. For foreign language territories, dubbing or subtitling generally involves “re-doing” in one way or another, and may mean starting from scratch. Again, it depends on the technology used. Film festivals, which abhor dubbed films as much as commercial exhibitors these days (even in Europe) abhor subtitled ones, have taken to using electronic subtitlers — the titles aren’t actually superimposed but merely added below the screen. I’m no expert on dubbing and am not up the varying technologies available across Europe, let alone Asia, Africa or Latin America. All of which is to indicate that the making, distributing and exhibiting of films is a far more complicated (and expensive) business than you seem to have allowed.

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marek 08.25.04 at 2:44 pm

Eliza

I also happen to think that Starbucks’ fame is inseperably intertwined with its Americanness and people’s impression of what an American brand will offer them

Thanks for the clarification – I think I understand your position (and that of your fictional alter ego) more clearly. But I still think the line I have quoted from your comment is simply wrong. Americanness is not part of Starbuck’s brand positioning in Europe and, empirically, as I said in my earlier comment, I have never come across anybody whose view about them – for or against – had anything to do with that.

Moreover, that’s not surprising: there is plenty of evidence that, to the extent this is a factor in decision making at all, general levels of knowledge about the ownership of companies is extremly limited. In the UK, for example, companies such as Hoover and Phillips are widely perceived to be British.

But my basic point is not that Starbuck’s UK customers mistakenly think of it as a British company; it is that its nationality simply doesn’t come into their judgement about whether they like the coffee or the ambiance.

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Joshua W. Burton 08.25.04 at 11:05 pm

One small but rather notable data point: despite an outspoken Zionist CEO and a cushy franchise deal with Delek (an established Israeli firm that successfully runs about half of that country’s gas stations), Starbucks *failed* in Israel.

Miserably.

This analysis isn’t too far off the mark, but the short version is that the coffee at Fourbucks just wasn’t good enough. They might have done better to compete for part of the _bad_ coffee market ( _botz_, or “mud” coffee, boiled in a finjan in the Turkish style), but that isn’t what they do. So, they left.

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Joshua W. Burton 08.25.04 at 11:08 pm

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John Quiggin 08.26.04 at 12:01 am

Starbucks didn’t fail in Australia, but they also didn’t do very well. The original franchise operator sold out and the company took over, IIRC.

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Hank 08.26.04 at 12:42 pm

One final point, John, re distribution, marketing and exhibition of films… Everything I said above stands to change drastically when the digital revolution is complete. With the advent of digital technology, “films” will (eventually) be made and shown entirely without recourse to celluloid film stock. They will be shot on lightweight digital video cameras (as many documentaries are done already), transferred for editing to computers, and then reproduced entirely in digital format. Fifty “prints” needed in Kansas City or Zurich or Buenos Aires? That will be as easy as pressing a few keys on a keyboard. No print costs, hardly any shipping costs. Dubbing and subtitling will be vastly simplified. On the other hand, the problem of piracy, already large, will grow to enormous, perhaps overwhelming, size. And exhibition will remain something of a problem for a while to come, since the technology of showing digital films is far from perfected, not to mention the disagreement over standards. And who will absorb the huge costs of transforming current projection and exhibition equipment to accomodate digital movies? Celluloid film will be around for some time (its visual quality is still superior), as it is in still photography, but the trend is distinctly in the digital direction. So if you are going to re-examine the movie business in the near future, John, you will be examining an industry in flux.

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