Starbucks... movies?

Starbucks (SBUX) and Lions Gate Films (LGF) announced a partnership today, in which "Starbucks will participate in all aspects of the marketing and distribution of Lionsgate and 2929 Entertainment's new film, 'Akeelah and the Bee,'" (MarketWatch) . As a Starbucks shareholder for a few years, and a Lions Gate follower for the past 6 months, I cannot say that I necessarily agree with this partnership. Maybe I'll grow to rue my own words, but for now, I don't see where Starbucks is going with this move.

For Lions Gate, on the other hand, this move is a significant one. Having a large scale corporation back the marketing and distribution cost is a huge way for Lions Gate to save big bucks. LGF already produces their films in a cost-effective manner - their recent hit, Hostel, cost only $4.8 million to make, and has already raked in $24 million internationally. Finding an outside partner to trim their margins can only benefit their company.

But what's in it for Starbucks? Are they looking to become a media conglomerate, as well as a coffee giant? In recent months, Starbucks has been pushing their "Starbucks Hear Music" line more and more. With Herbie Hancock tunes, Ray Charles favorites, (and during Christmas time, "A Charlie Brown Christmas") etc, CDs already stand out in what should be just a coffee shop. But I can kind of see the connection between coffee drinking and music. I myself like to relax with a morning cup of coffee, tunes on my laptop, while I watch the market open with streaming real time quotes. Everyone's different, but my relaxing, down time does usually involve music and coffee. Anyway, I digress. With the LGF marketing/distribution partnership, Starbucks will also carry the "Akeelah and the Bee" soundtrack and DVD (after it's released on DVD, of course). Can you imagine picking up your favorite DVD at a Starbucks? "Yeah, I'll have a tall, soy, caramel macchiato, with an Akeelah and Bee DVD and soundtrack combo." Doesn't have the same ring...

Maybe Starbucks feels it's venturing into the movie promotion market that other food locations dominate - McDonalds, Burger King, etc both have had large movie deals in the past. Currently, Burger King is STILL riding the Star Wars Episode 3 wave (even though the movie came out during the summer, and the DVD subsequently was released in November), with Star Wars watches, gift cards, toys - you name it, they got it. But does Starbucks really want that fast-food, summer-blockbuster-backing feel? I wouldn't want it to.

I have to continue to think about the ramifications of their partnership. At first glance, I'm not amused. But who knows? Maybe Starbucks has something extraordinary planned for their company that a small investor like myself can't even imagine.

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P.S. Earlier tonight, Boston Scientific (BSX) just increased it's bid against Johnson and Johnson, for Guidant, to $73 a share in cash and stock. Guidant already accepted JNJ's previous bid of $68.06 a share. Talk about an all out bidding war.