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I’ve been annoyed at Starbucks for awhile - it’s the CD racks, countertop displays and spinners that clutter their stores.

The Starbucks on the mauka side of Bishop and King Streets is a prime example of how this retail initiative is a nuisance to customers. That store is small - I’ve seen closets that are bigger. The CD displays make it much harder to stand in line when there’s more than 3 people waiting for a barista. I’m surprised there aren’t ADA lawsuits pending.

CDs and coffee don’t mix

I can’t imagine that the employees like dealing with these racks, either. What happens when a customer knocks over some CDs or spills a drink on merchandise? How do stores control shoplifting and shrinkage? What about teenagers and young children who decide to “play” with the packages?

Starbucks is phasing out its music CD retail business, according to an AlleyInsider.com article called Starbucks (BUX) Dumping CDs. Starbucks stores will have 4 CD slots per store.

I expect that Starbucks stores will still sell iTunes gift cards, as part of the WiFi promotional campaign for the iPhone and iPod Touch.

In addition, Starbucks has handed over the day-to-day management of its Hear music label to Concord Music Group.

Related articles and pages on billso.com

• Digital music
• iPhone
• 27 February 2008: Starbucks, coffee and music
• 26 February 2008: iTunes is number two
• 11 February 2008: Starbucks signs with AT&T
• 7 July 2004: Downloading music at the coffee bar

I don’t want to get on a rant here, but I’m just someone born very late in the baby boom. Frankly, I have more in common with Generation Y than with Generation X. But both generations have their faults. I saw this yesterday, while I attended Peter Kay’s presentation on crowd sourcing at the May 2008 HTCA meeting. Peter kept asking the audience what web services they had used. The number of hands got smaller with each service he named. Everyone had used Wikipedia. A few people knew about Twitter. Peter mentioned a few sites I had never used, like InTrade and IdeaScale.

I was the only person who raised his hand for Ning, the social networking portal that hosts TechHui and Peter’s latest project, HawaiiConCon.org. The Honolulu Advertiser’s article about the site is available here. and I mentioned TechHui in my billso.com post on 31 March 2008.

The generation gap

A few members of the audience got nervous when Peter discussed corporate wikis. I have heard and read similar questions as managers and academics struggle to keep up with the digital generation.

Tammy Erickson has a top 10 list on Business Week with some excellent comments about generational conflicts in the workplace.

More of the precious little snowflakes - and they’re so many of them in Gen X (the generation born between 1965 and 1982) and Gen Y (those born between 1983 and 1997) - need to wake up and smell the coffee.

It’s not Starbucks coffee.

It’s not even a maple nut crunch latte from the 7-11.

It’s Maxwell House scooped from the big blue can, brewed in a vat, simmered to the consistency of loose mud and served in a tiny styrofoam cup.

If you’re lucky, you get a little red plastic stir stick and some Coffeemate. Denis Leary would be proud of this coffee-flavored coffee.

And if you’re really lucky, someone made some Sanka because you can’t handle the caffeine.

Life sucks and it’s not fair

Many Gen Xers are hitting the ceiling in in their climb up the corporate ladder. There’s fewer CXO spots than there are Gen Xers. It’s not fair, but those stubborn folks in Generation Jones (born between 1954 and 1964) got there first. Their heroes are folks like Bill Gates, who would blow off his Harvard courses and try to make up the study time with end-of-the-term all-nighters.

It’s bad timing as the children of Generations X and Jones are going on to college and getting jobs. Members of Generation Y have feelings of entitlement and privilege that crash against a wall of indifference and disbelief in the real world.

The heroes of Generation Y are people like Facebook founder Mark Zuckerberg, who has bragged about skipping most of his Harvard art history course while he built a Facebook prototype. Zuckerberg passed that class after he built an online study guide that his classmates poured their notes and content into during the end of term reading period. Zuckerberg and Bill Gates dropped out of Harvard, but Zuckerberg got rich much faster. See this New York Times article for more details.

Helicopter parents

Gen Xers hate how the Generation Y calls their parents to ask advice about everything from class schedules to work responsibilities. It’s awkward when a college student’s helicopter parent calls a professor to intervene on their child’s behalf. It’s dumbfounding when this happens in the workplace. This 2006 MSNBC article about helicopter parents who manage their childrens’ job searches is a great example.

The current recession only makes matters worse for all involved. The home equity line is tapped out. No one wants to buy that piece of investment property that looked like a sweet deal 3 years ago. Bonuses aren’t as common at work anymore. This year’s vacation became next year’s vacation, and that’s just a maybe.

And yes, they’re buying Maxwell House and brewing their coffee at home.

Escape - if you can

There is hope. A few Gen Xers escape from corporate jobs to start their own small businesses. But many of the Xers are uncomfortable with modern technology. Text messaging and social networking are too much to handle. They can deal with their Netflix queue, but email is more their speed.

Members of Generation Y have kept up with the changes. Some Gen Xers are jealous that their younger Generation Y can navigate the Internet so easily and use online services to find new opportunities.

Some members of Generation Y are overwhelmed with communications options. Just read their blogs and feel their pain as they realize that everyday life is hard. ReadWriteWeb has a great collection of Generation Y links and RSS feeds, along with a video and some additional discussion.

But as I mentioned on 19 May 2008 in this billso.com article, many Americans don’t read blogs or send emails. To them, all of this conflict between generations may mean very little at all.

Images courtesy of Roadside Pictures and mark_the_legend_foster through a Creative Commons license.

Last night, every Starbucks store in the United States closed at 1730 local time for a three-hour training session. See this New York Times article about the training project.

I’ve written a long article, so you might want to get comfortable and find a tasty beverage.

The company’s CEO, Howard Schultz, wants Starbucks to return to its roots: making excellent coffee beverages, slowly. But Starbucks is working harder than ever to turn its miik-and-coffee shops into WiFi-enriched media listening lounges. It’s a plan that’s rife with assumptions about how the digital consumer entertains themselves.

Starbucks’ fascination with recorded music has never made much sense to me, because most fast food chains try to maximize customer turnover during the day. Serving customers faster should mean additional revenue per hour. A corporate playlist, slow service and comfy chairs should have the opposite effect.

Then again, most franchised burger joints don’t have merchandise displays on the floor. Starbucks stores do, and I often wonder who buys these items. If the service will be slower, and the company is returning to its roots, why doesn’t Starbucks remove the displays so that more customers could stand in line?

In the end, Starbucks wants its customers to spend more time in the store. It’s a core piece of the company’s strategy. If these customers have the means to afford a laptop computer or an iPod, they might buy a dessert or an extra beverage.

If at first you don’t succeed…

A few years ago, Starbucks experimented with CD burning kiosks in a few stores. Here’s some articles from Business Week in 2004 and KioskNews in 2006 about this dubious idea. I loved Howard Schultz’s quotes from the 2004 article – he was an enthusiastic champion of he projec.t Customers rarely used these stations, which housed a touch-screen Hewlett-Packard computer that helped users assemble their own playlists from an inventory of digital music. The service was slow, and the prices were about the same as itunes and other online merchants. The few customers that tried the kiosks usually figured out that they could burn their own CDs at home.

A recent New York Times article discussed an updated version of the media kiosk. Instead of a disc, customers would insert a USB memory stick. The payment and transfer process could take anywhere from a few minutes to an hour, depending upon the quality and size of the files involved. Flash memory transfer can be slow, after all.

The Starbucks kiosk project was designed to induce customer to try downloading digital music. The kiosks could hold between 250,000 and a million songs on their hard drives. Baristas aren’t known for their computer troubleshooting skills, however. When the kiosks malfunctioned, customers could not get assistance.

Last year, Starbucks decided to welcome Apple as a partner. After all, iTunes is the dominant digital music service in the USA, as I pointed out yesterday. There’s a legion of iPod users who already use iTunes at home to download music and videos.

Serving up slow coffee and fast downloads

It makes sense to ditch the kiosk and its limited inventory, and offer the entire iTunes inventory in each Starbucks. But video files are much larger than audio files, and Apple keeps adding more content to the iTunes store every day. Customers might be more likely to view and buy digital media at Starbucks if the download speeds are as good or better than their residential Internet connection.

Starbucks had to develop a way to offer the entire iTunes inventory without excessive bandwidth costs and slow download speeds. TUAW.com reported earlier this month that Starbucks may be installing edge servers in its stores. This type of server stores or caches content at the edge or end of a network, to give users faster access to files and services. An edge server is a good way to reduce bandwidth demands and manage latency by storing popular audio and video files inside the Starbucks store itself.

During the day, AT&T WiFi customers would use the WiFi access point at that Starbucks store to receive and buy audio and video content from Apple’s iTunes Store. Content would be saved to customers laptop computers, mobile phones, iPhones and iPods.

Popular audio and video files, including new releases, this week’s TV shows and best-sellers would be stored on the store’s edge server, so the user would receive their files at WiFi speed, instead of a much slower transmission from AT&T’s GSM mobile network or a remote server on the store’s broadband connection.

The edge server would receive fresh content late in the evening, based on local usage patterns and marketing plans, while the store is closed and bandwidth is less expensive. So Starbucks stores in Honolulu would probably get more Hawaiian music and “Lost” episodes on their edge servers, while Starbucks sites in Texas would store more country music and NASCAR highlights in their edge servers.

What’s the cache?

Akamai Technologies uses a similar approach to cache or store web applications, web pages, audio, video and other content in its global content distribution network network, and iTunes does use Akamai services. Yahoo, CNN, Slide and the NBA also use Akamai servers to mirror content for their web sites. Akamai’s network is designed as a cache for any Internet user, regardless of their connection. I discussed Akamai and latency on 6 June 2007.

Akamai’s network, and similar networks run by competitors, help Web publishers reach millions of users per day by mirroring content. I’ve never had this problem on billso.com, but it’s possible that someday my little web server will be swamped with requests from thousands of users for the same article. Don’t worry, billso.com has a cache feature that I can activate if I need it, so I don’t exceed my monthly bandwidth allocation.

The iTunes store inventory is placed on multiple servers located in major population centers, and connected to several fast Internet connections. Web retailers use these same networks to handle heavy shopping days like Mother’s Day and Black Monday.

Surfing on the edge is very akamai

Content distribution networks can also help remote locations with large Internet user populations. Honolulu is a great example. It makes much more sense for Hawaiian Telcom and Oceanic Time Warner to cache audio and video content on Oahu than to handle thousands of transoceanic requests for the same files. See my discussion on 7 June 2007.

The Wikipedia page for Akamai has some basic information, and links to additional articles and resources, including this 2006 Business Week article, a 2006 article from SeekingAlpha, and this MIT video – there is a play link above the photo on that page. The video is about an hour long, and it requires RealPlayer. It’s a great discussion of how an academic research project can be commercialized, but there’s a lot of technical jargon.

From today’s New York Times: Starbucks is switching WiFi providers. After a 6-year deal with T-Mobile, the milk-and-coffee merchant will offer WiFi access through AT&T. The arrangement gives AT&T 17,000 WiFi access points throughout the US, vaulting the telco to the number one spot in the country. AT&T has 70,000 WiFi hot spots worldwide.

AT&T has added mobile subscribers through its iPhone deal and other initiatives, while T-Mobile has struggled to keep pace.  However, AT&T will allow T-Mobile customers to use the Starbucks hot spots free of charge, through a roaming agreement. This should appease some T-Mobile subscribers who used Starbucks hot spots.

Starbucks card users will receive a free 2 hour WiFi session each day. Additional time on the wireless network starts at US$4 for 2 hours. AT&T broadband subscribers already had free access to AT&T hot spots as of last month.

Starbucks benefits by gaining access to AT&T’s larger mobile subscriber base. Other users will have a new reason to get and use a Starbucks card. Enhanced wireless access means that Starbucks customers might stay longer, and buy more items during their visit.

Chains like Starbucks often use a single national vendor for telecom offerings such as WiFi, to reduce security issues, consolidate reporting, and provide consistent services and branding across locations.

They won’t be buying breakfast sandwiches, though.

People are stealing cows in Wisconsin?

Starbucks sells more milk than coffee?

Apparently this is all true. As some regional and national standards of living continue to rise around the world, milk consumption has surged and milk prices have followed suit, according to this article in the New York Times:

What is unusual, and somewhat confusing, about the milk boom compared with other booming commodities is that milk is not like oil: You cannot stick it in barrels and stockpile it. It goes sour. Even in powder form, the most commoditized version, milk has a shelf life. As a result, only about 7 percent of all the milk produced globally is traded across borders. The rest is consumed in domestic markets, which are protected by geography and just as often by tariffs or subsidies.

One of my favorite memories from my move to Honolulu was my first trip to the Safeway. The price of milk was a shocker. It still is… then again, I don’t drink much milk… except when I go to Starbucks.