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Tuesday, October 19, 2010, 10:30 pm PT (01:30 am ET)

Starbucks partners with Apple, Yahoo to offer in-store digital content

Starbucks is partnering with Apple and Yahoo to roll out an in-store digital network Wednesday that will offer customers exclusive free e-books, movies and music in hopes of drawing customers to its stores.

The new content initiative isn't just a push by Starbucks to counter competition from other chains such as McDonald's that have begun encroaching on the coffee giant's territory, the Associated Press reports. It could also serve as a new revenue stream for the company as customers sample and purchase content while online at the company's coffee shops.

Starbucks began offering free Wi-Fi internet access at its locations in July, receiving 30 million log-ins in September. In its partnership with Yahoo, the Seattle, Wash.-based company will launch a portal for users who sign on at a Starbucks store. A welcome page will connect customers with related content, including free books, news, music and movies. Most of the free content will only be available while at the Starbucks location, the report notes, and Starbucks will receive an unspecified cut of any sales made through the network.

The service is designed to be "bite-sized," with small doses of content meant to be consumed in just a few minutes. In order to create the model, Starbucks and Yahoo first observed customers' habits.

"Users across the Internet are moving more into this 'snackable behavior' to begin with," said Burke Culligan, vice president of product management at Yahoo.

Customers will now be able to download the Starbucks free song of the week directly from iTunes while online at the store, instead of having to pick up cards with song codes, the report notes. Apple and Starbucks had previously been sued over the use of the custom music gift cards.

Apple and Starbucks have worked together in a music partnership for several years now, partnering on an iTunes Wi-Fi Music Store for Starbucks customers. In the past, Starbucks has given away millions of iTunes downloads to customers at its U.S. coffee shops.