Transcripts For WMAR Nightline 20100403 : vimarsana.com

tonight on nightline, coffee wars. we go inside the starbucks empire to find out how they reinvented one of america s iconic brands. but can this man keep americans lining up for another cup of joe? it s a nightline exclusive. are you smarter than a 4-year-old? there s a lot more to kid s play than meets the eye. need proof? we sit in on the experiments that show us that your child may be a lot smarter than you think. and, sweet child. top hat, sunglasses on, and the unmistakable guitar riffs. he needs just one name. slash is tonight s play list. announcer: from the global resources of abc news, with terry moran, martin bashir and cynthia mcfadden in new york city, this is nightline, april 2nd, 2010. good evening, i m terry moran. we begin tonight with coffee, and the star of the massive multibillion dollar industry. whether or not you call yourself a starbucks fan, it is nearly impossible to avoid the coffeehouse chain. it is the world s largest. a daily pit stop for millions of americans. but starbucks is not without competition, and their phones are eager to see them fail, and that may have happened, if it wasn t for the man you are about to meet, who returned to his roots to rescue the brand he built. it wasn t long ago that starbucks was reeling. for the first time ever, starbucks is reporting a decline in customers visiting its stores. starbucks announced that it is shutting down hundreds of coffee shops across the country. reporter: as the recession squeezed american incomes, $4 lattes seemed like a crazy indulgence to a lot of people, and mighty starbucks, 16,000 stores around the world, was facing a rekckoning. but there was something more. you have a company s performance that has not met your expectations. nor mip. reporter: there were just too many starbucks. it got ridiculous. chin up, man. you ll find another job. tell you what. why don t you apply at the starbucks on the other side of my desk. reporter: too much stuff for sale, trin kelts and food items and music and stuff. starbucks was in danger of becoming just another place in fast food america. i think what s happened in america is, there has been a commonization of neighborhoods through chains. reporter: howard schultz built starbucks over a quarter century. two years ago as things looked grim and schultz returned to day-to-day control, we talked with him in seattle. he knew what was coming. we were the darling of wall street for more than a decade. and now we re on the other side of that. reporter: sure enough, wall street hammered starbucks. its stock price, once more than $30 a share, collapsed to 9 bucks a share last year. and people wondered, was america sick of starbucks? i m living on coffee and nicotine reporter: at starbucks annual meeting last week, sheryl crowe sang, and howard schultz was singing a different tune. there s no finish line. we re not celebrating victory, but the company is extremely healthy, robust. reporter: starbucks is back. good to see you again. how you been? reporter: congratulations. thank you. reporter: starbucks has reported record quarterly earnings. two years of struggle and now you ve got this message to deliver. you got to feel like a survivor? i wouldn t use that word. no. i feel like the surprising word for me, because we survived the financial crisis, but it wasn t survival that brought us, brought the company back. what it was was our values and kind of we finding our voice again. reporter: it was a painful process. schultz closed hundreds of stores, laid off thousands of employees. slashed the company s cost by half a billion dollars. fear is a great motivator. and there was a concern about the trajectory of the business at the time. the financial crisis and where things might go, and i think it reminded me of what it was like when we started the business. reporter: so, schultz tried to refocus the company on coffee, and on what he calls the experience of starbucks. service, a neighborliness, a quiet, friendly, even special place. it worked. because, he argues, people actually love their starbucks. i think people underestimated the resiliency of the brand. the emotional connection that we have to our customers. reporter: but times have changed. you can find premium coffee lots of places now. mcdonald s and dunkin donuts got in the game. cheaper, too. and the consequences of starbucks just being so huge. star bucks is a fixture in the american landscape, and inevitab inevitably, a focus of controversy. star bucks is the latest battleground in gun control. a it s really become a symbolic battle for the soul of starbucks, and it makes schultz uncomfortable. in the last few weeks, we woke up one day and all of a sudden, starbucks was in the middle of this political cross fire between the people who want to bring a gun into starbucks and the people who want to prevent it. it s a very difficult, fragile situation. we re trying to abide by the law. reporter: the law in most states allows people to carry guns in public with certain restrictions. but is that really starbucks? in howard schultz s version of starbucks, could you see people around with guns? no, certainly not. but i m you know, i m not a politician. you know, i run a coffee company, and we re trying to abide by the laws in which we do business. reporter: a core part of starbucks identity is health care. for 20 years, starbucks em 34r0i yeploy yeeps have gotten health insurance from the company, even if they only worked part time. it was a signature policy, but in time, became the company s biggest u.s. expense, more than coffee itself. $300 million a year. and in the recession, wall street told schultz to cut it. people said to you, get out of this health care. yeah. people said to me, inside and outside the company, you have license to do this. you ll never have an opportunity to do this again. and no one will criticize you. everyone will understand. and this cut at the cloth of everything we stood for for 39 years. i wouldn t do it. so, schultz has, it seems, steered starbucks out of the troubled waters of the recession. so, what lies ahead? do you think a starbucks moment is over? i think the moment when it was at the very center of, not the american economy but part of the american consciousness, and where it sort of like a star had a luster that it threw off. i think that moment is over. reporter: brian simon is sort of a starbucks expert. a professor at temple and author of everything but the coffee. learning about america from starbucks. we talked at a local coffee shop springing up that seek to be the ant anti-starbucks. can starbucks go back again and recapture that cache you think they ve lost? i think that s really lost. i think when you sell culture and values, it s kind of femoral. it has a shelf life. starbucks may have lived out of it. reporter: schultz disagree, but he gets that something s changed about starbucks. the truth is that we used to arrive in a city and there would be a lot of fanfare. almost recognition, in terms of a city or neighborhood s validity. starbucks is ewe big by us to. we have to show our commitment to the neighborhood. reporter: how do you package authenticity? starbucks has redesigned stores and opened up a couple of stealth starbucks, like roy street coffee in seattle, where they serve beer and wine and feature local music and film. they have a lot of local events. they show movies on wednesdays and sundays. reporter: and there are big plans for growth. instant coffee. more starbucks coffee on more grocery store shelves. more outlets for its lower cost subsidiaries, seattle s best, and yes, more stores, especially overseas. you built the company twice now. no one said it exactly like that, but i appreciate that. and i feel very gratified. reporter: when we finished, the hard-driving, highly caffeinated schultz got himself another coffee. in the to go? reporter: to go. have a good day. thank you. thank you all. reporter: so, onto the next battle in the coffee wars. and for anyone wondering, that instant coffee is pretty good. when we come back, we ll turn from caffeine to kids. see why child s play means a lot more to your kids than you might think. our planet is alive with data. it s generated by cars on a freeway, patients in a hospital, electricity in the grid. the more we understand data, the more answers we find. patterns are easing traffic in over 400 cities. detecting disease faster, reducing energy costs by 10%. on a smarter planet, we can analyze all the data we now see to make the world work better. let s build a smarter planet. an everyday moment can turn romantic at a moment s notice. and when it does, men with erectile dyunction can be more confident in their ability to be ready with cialis. with two clinically proven dosing options, you can choose the moment that s right for you and your partner. 36-hour cialis and cialis forlyse. cialis for daily use is a low-dose tablet you take every day, so you can be ready anytime the moment s right. day or night. tell your doctor about your medical condition and all medications and ask if you re healthy enough for sexual activity. don t take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. don t drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache, or muscle ache. to avoid long-term injury, seek immediate medical help for an erection lasting more than 4 hours. if you have any sudden decrease or loss in hearing or vision, stop taking cialis and call your doctor right away. 36-hour cialis or cialis for daily use. ask your doctor if cialis is right for you. you can be ready for your moment with cialis. 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[ female announcer ] new crest 3d white professional effects whitestrips. also try crest 3d white toothpaste and rinse for a 3d white smile. raising children has become a big business. there s baby einstein and the mozart affect for kids, and more and more parents tend to drill their kids in structured lessons earlier and earlier. the hope? all that ambition and effort will pay off. but will it? can a child simply being a child, playing as children play, teach boys and girls more? a lot more? well, john donvan stepped into a child s world to find out. reporter: a preschool in berkeley, california. one that is specially built with little rooms that have little chairs, where little kids have been telling us, or at least telling psychologist allison gotnick, on that dark side of the one-way mirror that there is more going on in those little heads than we ever expected. because, she says, while there is that old, long-standing view about the brains of babies babies and young children were irrational and ill logical, or they lived in a blooming buzz of confusion. reporter: a view, a young one, she says, that has led to earlier and earlier parent intervention to help our kids with flash cards and dvds and starting school earlier than ever. but gotnick has a message for parents. stop it. you don t have to make your children smarter. they are just as smart as they can be. reporter: trust the system that s in the kid s head? that s right. reporter: ever see the movie parenthood? patty getting the language lessons, and the flash cards and the martial arts. funny, because we probably all know parents who are almost like that. who mean well, but gotnick says all of those well intentioned developmental exercises could actually be getting in the way of, well, development. what babies and young children are much better at doing is actually finding out things that are new. exploring new possibilities. imagining new alternatives. reporter: gotnick argues that child development is not happening when kids sit and do formal learning, but when they do this. playing. by themselves, with other kids, without so much adult interventi intervention. what are you pretending? super baby polar bear. reporter: kids at play are constantly experimenting. every made up game, every what if, a kind of puzzle to work through. oh, no! reporter: which brings us to the little kids in the little chairs. gotnick s experiments of what she has designed hundreds, show us how smart kids are at figuring things out naturally. the question is, whether these kids can figure out the necessary pattern for the music. now, they are 4 years old, an age where tradition says they should be con fulgzed by something like this. a grad school student says she s not sure how to make the music. let s figure it out. and look at this. this one is from gotnick s archives. this child get as turn and immediately figures out that only the last two moves are what s needed to get the music going. oh, good job! it worked it! reporter: in the trims we watched, that didn t always happen. 1 in 3 kids get it right away, but the others almost always attempt a solution, analyzing the result, working to conclusi conclusions, like little scientists, even if it just looks like a kid having fun. what children are doing learning in the real world is seeing complicated patterns of things that humans are doing and having to pick out which things are the ones that are most important for them to know. reporter: they have to extract what matters? exactly. what s really what science is all about, too. reporter: it s about inventing and know vating, which is what kids do when you just let them play. and the instinct to experiment all the time, she argues, is a gift we tend to lose as we grow up, because, to grow up is to know what babies don t know, which is how things work. mostly is knowing more a good thing? it is a great thing for getting things done but it may actually make it harder for us to learn something knew. reporter: the evolutionary purpose of childhood is be able to make mistakes and not get eat by a giant bird. children can try something and if it doesn t work, it s okay, because mom and dad are going to take care of them. reporter: which is why gotnick suggests parents to back off. don t insist of teaching them all that much, because they re teaching themselves. and first grade is coming soon enough anyway. the message so parents is to sort of kick back what you ne. what you need to do is give children the support system. give them things to play with, things to expore, people to play with, people to explore. that s the kind of ideal. reporter: and watch them innovate. because maybe we could all use a little bit more of that talent, which all of us once had, in abundance, back when we could fit in the little chairs. i m john donvan for nightline in berkeley, california. every one of them a miracle. and for more on the philosophical baby, dr. gotnick has a book with that same title. look for it. thanks to john donvan for that. when we come back, well, slash. takes us down to paradise city in tonight s play list. wondering about your retirement plan? who isn t? retirement planning is all questions. how long? how much? how soon? what if? welcome to answer city. td ameritrade s retirement center. i get planning tools, like wealth ruler. strategies. and investment ideas. and retirement experts, on the phone, when i need them. for a little help. or a lot. whether retirement is way off. or way close. time for fresh thinking. time for td ameritrade. announc announcer: nightline continues from new york city with terry moran. only a select few have the style and substance to pull it off. madonna, cher, prince, to name a few. but count this artist among the few who are achieved single name status. he did so as lead guitarist for guns n roses, founder of velvet revolver, and he s no sweet child, but slash is tonight s play list. i grew up with a wealth of music. my parents were both in the music business and probably had the best record collection sort of tower records. how many more times from zeppelin. that really sort of shows what it was all about. they just had a certain kind of sexuality in their music, and there was a certain kind of heaviness and there was a certain delicate touch, as well, all combined. a boy is born the song that used to catch my attention the most when i was a kid was living for the city about this country kid that moves to the city and gets pushed into selling some dope and ends up getting busted and spending the rest of his life in jail. that was always a very poignant song to me. please allow me to introduce myself i m a man of wealth for stones stuff, sympathy for the devil. very deeply rooted in black, you know, blues. one of the all-time best rhythm guitar players in keith richards and i don t think anybody s matched mick jagger for a vocal delivery that is reminiscence of muddy waters and blues greats. take me down to the paradise city i always thought paradise city was the anthem, as far as our body of work. i m a huge fan. if i hadn t been in that band i would have thought it was the coolest band in the world. get on up like a sex machine sex machine encompasses the talented contained in one song that james brown has. just listen to all the soul music that s come out in the last 30 years and you wonder where it came from. it would be james brown. just ridiculous rhythms. fantastic energy and tons of soul and tons of attitude. as much as i love prince, there probably would be no prince as we know him without james brown. i was probably in the thick of working on the guns n roses record, and i just heard this one song called the day i tried to live, and it was an amazing riff and great lyrics and great vocals from chris cornell, and i was just like, this is really great [ bleep ]. people sort of go, there s the 0s, and this hair metal move thament was going on and shifted gears in the 90s. and i thought that was pretty healthy. i don t think it had a negative effect on guns n roses. the only negative effect that we had to face was our own inter l internal, you know, combustion, you know what i mean? the person that people probably be surprised to hear that i like is lady gaga. i think she s awesome. there s this new one called telephone. that s fantastic. i hate to admit that i like it. i think she s a great song writer, and she s a free thi thinker, and does what she does and sort of revels in her limelight kind of thing. so, can really appreciate the stardom that she s got to. always had sort of diverse taste, as far as music goes, but at the same time, i m very rooted in my hard rock stuff, so, i think the rest of it is just keeping me entertained. jimmy: tonight, ger ward butler, gabrielle union and singer jamie cullum. all attractive people because, well, we re shallow. 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