Starbucks at the Movies

Is Starbucks (Nasdaq: SBUX  ) becoming the king of all media? Yesterday, the java giant announced that it would team up with Lions Gate Films (NYSE: LGF  ) to market Akeelah and the Bee, an inspirational film about an inner-city girl who rises through the ranks to compete in a national spelling bee.

So how do you spell "opportunity," Akeelah? Starbucks will screen the film for many of its baristas and promote the movie in stores for its big-screen debut in April. That same month, stateside Starbucks stores will begin selling the film's soundtrack; you'll be able to get the DVD with your double latte when it hits home video in early 2007.

It makes sense. Just as family entertainment projects flock to McDonald's (NYSE: MCD  ) and Burger King for kids'-meal promotions, the 10,500-unit-strong Starbucks empire would be remiss not to capitalize on its stupendous scale to move more than just muffins and mochas.

Starbucks is already becoming a powerful force in music. From its Hear coffeehouse concept, to its listening kiosks in some Seattle stores, to its own channel on XM Satellite Radio (Nasdaq: XMSR  ) , the company has used its hip vibe to cultivate an air of musical authority.

The Akeelah and the Bee soundtrack won't even be the first music CD offered through Starbucks stores. The chain has sold compilation CDs, and worked on discs by Alanis Morissette, Herbie Hancock, Ray Charles, and Bob Dylan. That's why Akeelah's arrival at your local Starbucks may not seem too out of place. The real breakthrough may come early next year, when the film's DVD shows up by the register. If sales are good, who knows how quickly the company's film rack will grow? Since a disc purchase is unlikely to sway a java junkie out of ordering a cup of coffee as well, the sale will be purely incremental.

As impressive as the company's same-store sales have been over the years, Akeelah provides a little more ammo to make next year even stronger. Spellbindingly good move, Starbucks. Now let's see what you can do for an encore.

XM Satellite Radio was a recent pick in theMotley Fool Rule Breakersnewsletter service. Starbucks was one of the more popular selections in the 1990s in David Gardner's Rule Breaker Portfolio, which inspired the modern-day newsletter. To perk up your porfolio with a market-beating batch of growth stocks, sign up for a 30-day free trial.

Longtime Fool contributor Rick Munarriz wonders if the spelling bee film may inspire some honey-themed coffee concoctions. He does not own shares in any of the companies in this story. The Fool has a disclosure policy. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


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