Look out, Borders (NYSE: BGP ) and Barnes & Noble (NYSE: BKS ) : There's a new kid in town peddling books (and music!). And that new kid's not so new -- it's none other than Starbucks (Nasdaq: SBUX ) .
Kidding! Borders and Barnes & Noble have little to fear, since Starbucks is hardly copying their bookstore cafe idea, although it is branching out into books. Some of you might have noticed an edition of the children's book The Little Engine That Could in the coffee outlets recently. Now we learn that in October, the company will offer the novel For One More Day by Mitch Albom -- published by Disney's (NYSE: DIS ) Hyperion -- in its stores.
This may seem like a flashback to the coffee king's foray into film with last winter's promotion of Akeelahand the Bee. Of course, we know that that deal with Lions Gate (NYSE: LGF ) didn't go as hoped, since the movie got fairly good critical acclaim but a successful box-office take just didn't materialize. On the other hand, Starbucks has gotten a lot of positive reaction to its success with limited music distribution.
All of the media offerings have been carefully selected to go along with the Starbucks brand (thereby appealing to its typical customer). Indeed, the book deal includes donations to a literacy program, and the company is no stranger to charitable efforts as part of its mission (for example, purchases of Ethos Water include donations to clean-water efforts in developing countries). On the other hand, it's interesting that the deal to distribute For One More Day is by no means exclusive -- in fact, Starbucks won't begin offering the book until after it's available in bookstores.
The coffee shop ambience lends itself well to such endeavors; although McDonald's (NYSE: MCD ) is a big film promoter (a recent cup depicting Johnny Depp in the new Pirates of the Caribbean was a big hit with me), I can't envision too many people ordering up a book to go with their fries, and the fast food mentality certainly doesn't lend itself to getting comfortable and staying a while. But what goes better with a cup of coffee and a cushy sofa than a novel? That's the kind of day many of us aspire to (although maybe rarely achieve) -- relaxing at the coffee shop with a good book in our hands.
As long as Starbucks exercises the same kind of discretion it has used with music as it selects media to promote, and keeps distribution limited (too much media clutter in the local shop might cramp some customers' style), such initiatives seem like a perfect fit to me. They certainly have the ability to work well for artists and the corporations that sign them, too, since the limited selection in each store gets more undivided attention from consumers. (The Associated Press said that The Little Engine That Could sold 25,000 copies through Starbucks in just one week.)
Of course, shareholders ought to be relieved that the company doesn't plan to go hog wild with the entertainment offerings. The AP quoted Ken Lombard, president of Starbucks Entertainment, as saying, "We're going to stay true to the core of who we are. We're a coffee company." And that's a good thing -- businesses that lose their focus often lose their competitive advantage, and that's the last thing anybody wants to see from Starbucks.
Kick back for some more caffeinated Foolish content:
- Last week, Starbucks' earnings were a bitter brew for some investors.
- Speaking of non-coffee sales, Starbucks will go for some glitter.
- Flash back to Starbucks' trip to the movies -- which actually stung like a bee.
Starbucks and Disney are Motley Fool Stock Advisor selections. To find out what other companies David and Tom Gardner have recommended as great picks for long-term investors, click here for a 30-day free trial.
Alyce Lomax owns shares of Starbucks, but of none of the other companies mentioned.