A Toronto coffee chain is now serving up free WiFi along with its lattes.
Friendly Inc., to provide wireless Internet to its customers in exchange for a minute of their attention. miofrio! juice + java has three locations in Toronto and plans to open 30 more in the next five years.
Wireless Friendly has outfitted the stores with its own 802.11b HotSpotz branded Internet system at cost and is not charging end users a dime, but chief operating officer Mark Tauschek is confident that the company’s advertisement-based business model makes the initiative financially viable.
“”We see charging consumers on a pay-per-use basis as unjustified,”” Tauschek said.
Instead, Wireless Friendly is selling advertising time to organizations that want to target the high-tech WiFi user demographic. These advertisements are between 15 and 60 seconds in length, with the end user watching a total of 60 seconds’ worth before his or her free online time begins. Tauschek calls this a “”captive one-on-one experience,”” as users are unlikely to abandon laptops or PDAs to avoid watching a commercial, and an attractive option for advertisers.
“”Four groups are winning here. It’s an attractive ad opportunity for advertisers; the venue is giving an amenity that others aren’t; we win; and the end user is the big winner, because they don’t have to pay for it. It’s a happy medium for all of us,”” Tauschek said.
Richard Chase, general manager of operations for miofrio! opted for Wireless Friendly’s WiFi solution because of the fact that it is free for his customers.
“”It is unacceptable to charge people for wireless Internet. I know other companies do, but they’re gouging people,”” he said.
According to Tauschek, the time is right to introduce free WiFi service to the public because costs have gone through the floor in the past few years.
“”People are going to begin to expect it to be an amenity like air conditioning or, to the extreme, a washroom,”” he said.
Wireless Friendly’s competitors target road warriors with unlimited expense accounts, Tauschek said. He cited one pay-per-use provider that charges up to nine dollars per hour for WiFi access.
“”That’s more than a 4,700 per cent markup on bandwidth,”” he said. “”That truly is gouging.””
J.P. Tanguay, Wireless Friendly’s CEO, added that this kind of markup is much greater when more than one person is accessing the bandwidth.
Warren Chaisatien, a senior analyst for telecommunications at IDC Canada in Toronto, said that Wireless Friendly’s offering is “”good news for the industry because it’s stimulating demand.””
He also noted that it will make pay-per-use organizations have to work harder to legitimize charging for WiFi service. However, Chaisatien doesn’t expect cost-based options to disappear anytime soon.
“”The hotspot market is going to become very similar to parking spots — there will be no single business model. Some places you can park for free, sometimes you’re charged by the half-hour, the hour, or for overnight. Sometimes you can go back to the office and expense it to your boss, sometimes you can’t. Sometimes hotels and restaurants provide it for free because they want to attract you; sometimes they pay for 50 per cent of it. It’s really going to be all over the place,”” he said.
Customers using either a Mac or Windows-based laptop equipped with an 802.11b wireless network card or a wireless enabled PDA can currently access the Internet at all of miofrio!’s stores. Wireless Friendly expects to complete HotSpotz installations in 150 different locations by the end of 2003.
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