Starbucks and Vine Changes the Rules

Chain Gets Profits from Lions Gate film, without Paying for its Production

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Starbucks' unprecedented deal with Lions Gate Films to co-produce "Akeelah and the Bee"-and share in the film's profits-could rewrite the way marketing partnerships are formed in Hollywood.

The agreement with Starbucks, which has already changed the way music is distributed and promoted, demonstrates the coffee chain's growing clout in Hollywood,
Bee Season: Flash cards spell it out for Starbucks patrons.
Bee Season: Flash cards spell it out for Starbucks patrons.
where studios usually closely guard their profits and have always steadfastly refused to give marketing partners a cut.

In this case Starbucks did not help finance the film, co-produced with Lions Gate and the Mark Cuban/Todd Wagner-owned 2929 Entertainment, but will share in all its profit streams, from box office to DVD, soundtrack and merchandise. Executives wouldn't talk about the specific split. In exchange, it will use its 8,300 U.S. and Canadian stores, and the trust it has built with millions of customers, to hype the spelling-bee movie.

The deal has renewed a debate in Hollywood about what promotional partners want from studios in return for their support of films and other entertainment. It's long been discussed that there could come a time when marketers want to be paid for their participation in movie tie-ins, instead of the other way around. Hollywood, for its part, has refused to treat marketers' real estate as a media buy and marketers haven't forced the issue. Executives wonder, though, depending on the performance of "Akeelah," if that situation will change. Others don't see it happening.

"We don't share box office with Wal-Mart, even though they do movie promotions and licensed merchandise boutiques and retail-tainment," said one senior studio executive. "Is Starbucks' real estate more valuable than Wal-Mart's?"

Ken Lombard, president of Starbucks Entertainment, said the marketer intends to give the "Akeelah" treatment to several feature films a year. While it hasn't yet decided a new project, it does know the terms. "We're not going to invest in any film," Mr. Lombard said. "We're in the first stages of monetizing the assets of our footprint."

Starbucks brings to the table an enormous and passionate consumer base that already trusts the marketer's entertainment picks, which includes the Grammy-winning Ray Charles CD "Genius Loves Company."

Its participation, with Starbucks' employees becoming evangelists for "Akeelah" and their locations reflecting its theme, is weightier than a simple media buy, said Tim Palen, Lions Gate co-president of marketing. "It's a partnership in every sense of the word," Mr. Palen said.

Starbucks executives were attracted to "Akeelah," which follows a young South Central Los Angeles girl's journey from her rough-and-tumble neighborhood to the national spelling bee, because it reinforces a sense of community, a core value of the marketer, and has a positive, aspirational tone.

built on trust

"It's a very important part of the relationship we have with our customers," said Brad Stevens, Starbucks' VP-marketing. "They trust that we'll bring them a movie that's worth their time."

Starbucks' campaign around "Akeelah," launching this week and lasting through mid-May, will take an "experiential" approach, using flashcards sprinkled around the stores and spelling-bee-caliber words on chalkboards as a way to get customers chatting and interacting, Mr. Stevens said.

There will be no movie posters or other traditional promotional trappings, though the chain will have the movie's release date, April 28, and logo on its cup sleeves, a first for Starbucks.

The chain will stock travel-size Scrabble games-the brand plays a role in the movie-and may host local market study sessions for spelling-bee contestants.

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Kate Macarthur contributed to this report.
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