New York Times' Exclusive Run at Starbucks Ends

USA Today Returns After 10 Years as Coffee Chain Cites Customer Taste for Media Choice

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NEW YORK (AdAge.com) -- After nearly 10 years as the only national newspaper for sale in many Starbucks around the country, The New York Times is facing new coffeehouse competition today as USA Today returns to 6,500 Starbucks stores.

Starbucks positioned its new openness as an effort to better serve its customers, who've come to expect more choices in media throughout their days.
Starbucks positioned its new openness as an effort to better serve its customers, who've come to expect more choices in media throughout their days. Credit: AP
The change doesn't affect many licensed Starbucks locations in airports or malls, where various stores have been free to sell a wider variety of newspapers or none at all. But it means that almost all the company-operated stores that have featured The Times alone among national papers for the past decade will now give shoppers another choice, in addition to the local papers that have been there all along.

And given The Wall Street Journal's new aggressiveness under Rupert Murdoch, particularly toward The Times, it wouldn't be surprising to find a third national competitor barge in soon enough. USA Today, which derives much of its circulation from hotel distribution, already faced a new challenge from The Journal last year when Marriott said it would stop automatically giving the paper to guests, instead letting them choose USA Today, The Journal, a local paper or none at all.

USA Today actually helped introduce newspapers to Starbucks back in the 1990s, but by 2000 was cast out in favor of The Times, which struck a three-year exclusivity deal that was reportedly paid for with ad space to promote the chain.

Starbucks: Customers want media choice
Starbucks positioned its new openness as an effort to better serve its customers, who've come to expect more choices in media throughout their days. "Consumer news is part of the coffeehouse experience," said Chris Bruzzo, VP for brand content and online at Starbucks Coffee. "We're delighted to be able to provide our customers with more selection in how they choose to source their news content and customize their Starbucks experience."

Asked about the prospects of The Journal joining Starbucks news racks, Mr. Bruzzo said only that he had no further announcements at this time.

A new battle between USA Today and The New York Times inside 6,500 Starbucks won't radically shift either paper's fortunes, but both papers want to be there for obvious reasons.

USA Today's average weekday newsstand sales over the six months ending in September 2009 declined 18% from the six months ending in September 2008, according to the paper's reports with the Audit Bureau of Circulations. The Times' average weekday newsstand sales fell 16% over the same period.

Those declines owe partly, of course, to intervening cover-price hikes, a 2008 presidential election that goosed newspaper sales in the earlier period and a recession that hasn't helped sales of anything.

Any front welcome in circulation wars
But publishers are still eager to reach consumers wherever they are -- especially a popular hangout well-suited to lingering over a paper.

Starbucks may not be essential to USA Today, which weathered The Times's exclusive pacts with the chain just fine, but Starbucks has gotten more attractive as its reach has grown, said Larry Lindquist, senior VP of circulation at USA Today. "Starbucks is a lot bigger now, with a lot more stores, so it's more important to us now than it was to us then," he said.

Almost any expansion of a paper's distribution is a positive thing, said John Morton, a veteran newspaper industry analyst and president of the media consulting firm Morton Research. "This is not a monumental event, but certainly it's an advantageous one to USA Today," he said.

The New York Times said it was not concerned about any new coffee-shop competition. "We are delighted to continue our longstanding relationship, now going on 10 years, with Starbucks," a spokeswoman said. "We understand they are adding another newspaper in addition to The New York Times and other local papers, and that's fine. Customers will have more choices, just like they do online and on every newsstand."

"Ten years ago when we first negotiated the contract with Starbucks, it was a different universe," the spokeswoman added. "Competition has increased exponentially. But, we have a strong affinity with our readers and believe they will continue to select The New York Times, just as they do now when they have a choice."

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