Comments on: Starbucker

By: Hank

Hank — Thu, 26 Aug 2004 12:42:31 +0000

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.

By: John Quiggin

John Quiggin — Thu, 26 Aug 2004 00:01:22 +0000

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.

By: Joshua W. Burton

Joshua W. Burton — Wed, 25 Aug 2004 23:08:58 +0000

Sorry, that link was http://allisonkaplansommer.blogmosis.com/history/011487.html

By: Joshua W. Burton

Joshua W. Burton — Wed, 25 Aug 2004 23:05:51 +0000

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.

By: marek

marek — Wed, 25 Aug 2004 14:44:04 +0000

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.

By: Hank

Hank — Wed, 25 Aug 2004 14:19:50 +0000

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.

By: momo

momo — Wed, 25 Aug 2004 12:57:00 +0000

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.

By: Eliza Dashwood

Eliza Dashwood — Wed, 25 Aug 2004 12:28:55 +0000

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.

By: momo

momo — Wed, 25 Aug 2004 08:43:19 +0000

“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!

By: John Quiggin

John Quiggin — Wed, 25 Aug 2004 05:28:31 +0000

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?

By: Hank

Hank — Wed, 25 Aug 2004 03:17:17 +0000

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”.

By: Eliza Dashwood

Eliza Dashwood — Wed, 25 Aug 2004 00:12:46 +0000

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.

By: John Quiggin

John Quiggin — Wed, 25 Aug 2004 00:03:41 +0000

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?

By: Hank

Hank — Tue, 24 Aug 2004 23:28:41 +0000

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.

By: marek

marek — Tue, 24 Aug 2004 23:14:23 +0000

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.