Randall Stross writes in his New York Time article “What Starbucks Can Learn From the Movie Palace”:1 about how hotspots today are just like air conditioning was in the early part of last century for movie theaters.
bq. In the 1920s, when air-conditioning began to be installed in movie theaters, owners had to spend a sizable sum — $50,000 (roughly equivalent to $570,000 today) — to transform the property into a “cold spot.” But it was worth it. Before the “refrigeratory process” came along, theaters could not draw customers during the summer because of the unbearable heat in confined space. With air-conditioning, patronage increased so sharply that even the largest investments were quickly repaid.
I’ve often used the comparison of Wi-Fi to 1920′s air conditioning in my talks, though my comparisons use the department stores of that time as the places of comparison. This viewpoint actually started with my friend at MIT, “Eric Plosky”:2. I think this comparison is an even better one than movie theaters because department stores are quasi/semi-public spaces. (In other words, you don’t have to purchase a ticket to get into a department store, unlike a movie theater.)
Back in the 20′s, department stores, which were the places to shop and be seen, started to install this new invention called “air conditioning”. It started with a couple larger stores, who could afford it. They saw that people were much more comfortable in a cool store, and would linger longer, which meant they were more likely to spend more money.
Smaller department stores saw this too, and some of them installed the expensive devices. These smaller stores saw an even bigger bump in sales, in part because of the novelty, and in part because they had something that many of the larger stores did not: comfort. Installing air conditioning, even though it was expensive, allowed smaller department stores to better compete with their larger rivals. Smart small store owners who could afford it installed the devices and reaped the benefits.
After a while, the larger stores woke up to the fact that they were being beaten by the smaller stores, and some of them also installed air conditioning. This in turn caused even more stores (both large and small) to install the devices because they began to realize that, with so many of their competitors offering such comfort to potential shoppers, they couldn’t afford to *not* install it.
An thus the technology of air conditioning became went through an inflection point: you couldn’t compete as a department store *unless* you had air conditioning. The devices became requirements for the business. Either you had it, or you closed up shop.
Wi-Fi is exactly like this. Starbucks is like a big department store that offered the amenity early on (though they charged for it). Lots of smaller coffee shops and other restaurants and bars started installing it — many with the help of local community wireless organizations like “NYCwireless”:3 and “Ile Sans Fil”:4 — and offered it for free. More and more, we’re seeing places install this cheap amenity because their competitors are doing it.
We’ve not yet passed the inflection point, but we’re heading there. I speak to businesses all the time that just want to install free Wi-Fi because they don’t feel they can compete without it.
Interestingly, we also see this with public parks. We get asked all the time to help get a free Wi-Fi network installed because a park wants to attract visitors, and they see other parks, like Bryant Park, that have been successful offering free Wi-Fi.
[1]http://www.nytimes.com/2007/03/04/business/yourmoney/04digi.html?amp;ei=5090&en=65ffd17d76dd5fb5&partner=rssuserland&ex=1330664400&emc=rss&pagewanted=all
[2]http://www.subjectverb.com/www/
[3]http://www.nycwireless.net
[4]http://www.ilesansfil.org
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