Starbucks is smart to stop charging for Internet access. Everyone should follow suit.

 Whatever you think of its coffee, Starbucks has always been a nice place to get some work done. The stores are clean, the music inoffensive, the furniture comfortable, and the electrical outlets plentiful. And if you just need a quick pit stop to charge your phone, transfer photos to your laptop, or play a little Minesweeper, the Starbucks mermaid is always just around the corner, whether you're in Boston, Bangor or Beijing. Convenience has no borders.

Unless, of course, if you want to use the Internet. While local coffee shops have long offered free Wi-Fi, Starbucks signed up with a series of mobile providers over the years to gouge customers on Internet service. The company now offers free access for two hours, but only for customers who've recently purchased an item using a Starbucks card. Additional hours sell at the eye-burning rate of $3.99, a price that would lead you to believe that Starbucks is using some kind of next-generation fiber-optic network built from recycled coffee grounds. In fact, the company gets DSL services through AT&T. Like their coffee, a huge chunk of that $4-an-hour is pure profit.

But Starbucks has finally seen the light. On Monday, CEO Howard Schultz announced that beginning July 1, customers at all "company-owned stores" in the United States will get free unlimited Wi-Fi service with a single click—no complicated sign-up process, and no purchase necessary.

("Company-owned stores" exempts locations in supermarkets, hotels, bookstores, and other crannies of American commerce.) Starting this fall, customers surfing Starbucks' network will also get free access to paid Web content, including the Wall Street Journal, Zagat and select downloads from iTunes. The company hopes that its Web efforts will continue a recent revitalization of its stores—Starbucks was hit hard during the recession, but sales began to increase earlier this year.

Starbucks is certainly late to the free Wi-Fi game. McDonald's, among other rivals, began offering no-charge Wi-Fi this year.* Still, compared to other service businesses, Starbucks looks prescient. The world's upmarket hotels, for instance, still charge $10 to $20 a day for the Internet, the closest you can come to seeing poor creatures getting fleeced without visiting a sheep farm. Here's hoping Starbucks' plan prompts radical change in the tourism and hospitality industries. Per-hour Wi-Fi is a dying business. The sooner that hotels, airports, convention centers, and other similar places realize this, the happier they'll make their customers.

The case against charging for Wi-Fi is partly technological: Thanks to smartphones and other cellular gadgets, a lot of us don't need to pay up anymore. Phones capable of Wi-Fi "tethering"—which allow you to get Internet access for your laptop through your cell plan—are becoming more numerous; there are several ways to turn on free tethering in your Android phone, and Verizon offers it at no additional cost on the Palm Pre. (AT&T charges a ridiculous $20 a month for iPhone tethering.)

People whose phones can't tether are buying devices like the Mi-Fi—mobile Wi-Fi hotspots that allow your computer to take advantage of cellular networks. These services are relatively pricey—Verizon's Mi-Fi plans start at $40 a month—but for frequent travelers (who make up the bulk of the business at many hotel chains), these devices are much cheaper and more convenient than paying for Wi-Fi at airports and hotels. If you spend just four days a month on the road, it's wise to get a Mi-Fi. And if you've got a smartphone, you obviously don't need to tether if you just want a small taste of the Internet. I used to have to pay for hotel Wi-Fi just to watch for urgent e-mail and find local restaurants; now I can do all that for no extra charge on my phone.

Thanks to the smartphone war between Apple, Google, RIM, Microsoft, and Palm, we're bound to see rates for these cellular plans fall, and smartphone adoption rates are skyrocketing. In the same way that you'd be a fool to make a long-distance call on your hotel phone, soon almost no one will need to pay for hotel Wi-Fi. The revenue well is drying up. The smartest hotels are coming around to this view. Many mid- and low-budget chains—including Best Western, Comfort Inn, and Holiday Inn—have recently switched to free Wi-Fi. It's the pricey places that continue to charge—you can get free Wi-Fi at the Ramada, but not at the Ritz.

Perhaps the theory is that people ponying up $500 for a room aren't going to budge at paying $10 for the Web. Maybe. But if you're not charging them for them extra for the soap or the toilet paper, why nickel-and-dime the Internet? Although there are no firm numbers on how much it costs hotels to provide Wi-Fi, it's likely no more than a dollar per room per night (and probably far less, considering the speed you usually get when you do pay; if you'd like to relive the joys of the dial-up Internet, visit your nearest fancy hotel's "business center.")

I expect some readers will attack me as a hippie freeloader looking for a Wi-Fi handout. You'll also point out that even if providing the network is cheap, there may be other costs associated with giving away Internet access. Local coffee shops have long lamented the problem of Wi-Fi-induced lethargy—there seems to be no better way to keep a nonpaying patron in the store than to give him endless electricity and Internet access. The Wall Street Journal reported last year that some mom-and-pop shops have begun blocking their wall plugs or prohibiting laptops during certain hours in order to discourage Internet moochers.

But the evidence for this trend appears thin. Other coffee shops report that Wi-Fi has been a draw, a way to market an establishment as friendly and welcoming compared to the Wi-Fi-crippled Starbucks. And the coffee behemoth says it doesn't expect to be overrun by Wi-Fi leeches. Currently laptop users spend an average of 60 minutes on Starbucks network, and smartphone users spend 15 minutes, a rep told me; the company doesn't expect those numbers to rise substantially when it rolls out its new plan.

And when it does, the hotels will really feel the pinch. Why buy Wi-Fi in your room when you can get it with your latte in the morning? Or, heck, skip the latte. The Internet is free. - Farhad Manjoo

Change in Copyright Law: A possible solution to news content crisis?

Copyright law reform as one remedy for plummeting profits at traditional news organizations was proposed at a media affairs panel organized by the non-profit Center for Communication and hosted by Fordham University earlier this month.

Former public television executive and current Fordham Professor William F. Baker moderated the event which was called “The Audience: How America Uses its Media.” On the panel: Nielsen executive Gerry Byrne and media lawyer Dean Ringel, a partner at the New York law firm of Cahill Gordon & Reindel.

Ringel advocated introducing compulsory licensing fees for Web-based agregators or re-distributors of news content. Under Ringel’s system, sites like Google would be required to share profits with or pay a fee to any news organization whose content they post, in a system similar to the compulsory licensing system than currently manages rights for cable television and music.

He noted that current copyright law protects the specific expression of information but does not protect the work necessary to obtain that information. Ringel argued that papers like the New York Times, which spend prodigious sums on reporter security in dangerous places around the globe, should get some of the revenue made by third-parties who distribute their content.

Ringel’s proposed system would apply only to sites obtaining revenue from re-posting news content. Sites which did not charge fees or seek advertising revenue, and perhaps even some commercial sites whose readership is below a certain threshold, would be exempt from the requirements.

Denying profits to newspapers and magazines is to “risk depriving our society as a whole of neutral, professional, prepared and analytic information” said Ringel. Dr. Baker echoed Ringel’s statement by quoting Thomas Jefferson: “If a nation expects to be both ignorant and free, in a state of civilization, it expects what never was and never shall be.” All three participants agreed a reliably informed citizenry underpins any successful democracy.

Legal solutions that prohibit the re-posting of headlines or web links entirely risk inhibiting the free flow of information, said Ringel. A content licensing and revenue sharing plan, argued Ringel, would allow the marketplace of ideas while also assuring that the activity of reporting is properly rewarded.

Bynre, senior vice-president at Nielsen Business Media -- he oversees Hollywood Reporter, Adweek and Editor & Publisher, among many other titles -- spoke frankly about the prospects for economic stability in the news business.

“The TV advertising market in Los Angeles used to be worth $1.2 billion dollars but now the same number of stations are fighting over $500 million,” said Byrne, “and that means that reporters all across L.A. are getting wiped out of stations because there isn’t anybody whose willing to pay for them anymore.”

Byrne, who is a Marine Corps veteran, joked that “Sometimes I feel like it would be easier to put on an army uniform and go fight in Afghanistan or Iraq than it would be to stay in the news business.”

The panel members also speculated on what the media industry may look like in the future.

Agreeing with Dr. Baker’s statement that mobile devices are sure to become more important as media outlets, Byrne said, “Mobile realities are going to explode. Outside the U.S. mobile platforms are way more advanced than we are here.”

Byrne was hopeful about the ability of local media to perform a watchdog function. “Journalists on a local basis are the cleansing system for what goes on in small communities. Thing like whether local politicians or real estate developers are doing what they’re supposed to.” said Byrne. - Evan Leatherwood

"Internet influences film audiences".... duh! (but good to know anyway!)

If marketing mavens want to reach younger moviegoers when promoting their films, they need to embrace social networks or risk being ignored.

That was the overall message of Moviegoers 2010, the first report on moviegoing habits produced by Stradella Road, the entertainment marketing firm founded by former New Line Web guru Gordon Paddison that hopes to assist film marketers in determining how to reach consumers over the next decade.

The study found that teens and twentysomethings are especially focused on being able to customize entertainment and are quick to share their opinions with others digitally -- especially as usage of the Internet, mobile devices and DVRs has become more widespread. An estimated 94% of all moviegoers are now online.

The younger demo is especially key in spreading word of mouth, with 73% of moviegoers surveyed having profiles on social networking sites.

It's a point that's been made a number of times as sites like MySpace, Facebook and Twitter have grown in popularity. But the study is one of the few to break down specific age groups and how they consume movies and the marketing messages leading up to their releases.

-Teens (age 13-17) are "all about sharing information and group thinking," the report said, with social networking a critical communication tool. They go to movies in large groups and are heavily influenced by their friends' opinions. They also prefer texting over having phone conversations. More than 70% also surf the Web and text while watching TV, and 67% of them socialize with friends online.

-Twentysomethings (age 18-29) "are digital natives that have grown up with technology" and are more likely to go online for movie info and to share what they think about movies via social networks (58% socialize with friends online). They use the Internet to find any kind of information and place a high value on online consumer reviews and sites that aggregate reviews.

-Auds in their 30s are time-constrained, with parenthood dominating their decisions. They split their moviegoing trips between their children and their spouses. They "spend the highest number of hours online and rep the highest use of technology (Internet, broadband access, DVR ownership and cell phone)." They also view the most recorded TV and skip the most ads via their DVRs.

-Those in their 40s embrace traditional media like magazines and newspapers, with moviegoing dominated by special family occasions and influenced by teens.

-And fiftysomethings avoid crowds, prefer matinees and "skip ads because they think there are too many commercials on TV."

Given the increased influence of websites on which consumers buy movie tickets, AOL, Facebook, Fandango, Google, Microsoft, MovieTickets.com and Yahoo were enlisted to supply data for the study.

Study was conducted by surveying 1,547 moderate-to-heavy moviegoers over eight days in July, with an additional 2,305 questioned by phone or online during July. Nielsen NRG managed the research fieldwork.

Although many moviegoers are going online to get info on upcoming releases, TV still dominates as the leading tool to generate awareness for films, with 73% of those surveyed saying they first heard about a movie by watching a 30-second spot. In-theater trailers were close behind with 70%, followed by word of mouth (46%) and the Internet (44%).

Most films are now considered critic-proof, especially among the younger set, with 84% of moviegoers saying, "When they make up their mind to see a movie, it doesn't matter what the critics say about it."

It may depend on who's giving them the thumbs up or down, however.

Of those surveyed, 75% said they trust a friend's opinion more than a movie critic; 80% said they were more likely to see a movie after hearing a positive review from other moviegoers, while only 67% said a thumbs up from a professional critic had the same weight.

Yet only 40% said negative reviews from their peers would dissuade them from seeing a movie, while an even lower 28% would be kept from theaters because of a critic's opinion, meaning that at the end of the day, negative word of mouth doesn't have as much influence.

While 62% now get their reviews online, only auds over 50 rely on newspaper reviews.

The results hardly give Hollywood anything to worry about. The box office is so far up this year and looks like it will be strong for years to come despite the current recession, the study said.

That is mainly because 79% of those questioned said, "Going to the movies is a good escape from everyday life." - Marc Graser