I'm not so sure about the argument that most people would forgo the $4 cup of Starbucks, given a free alternative. Every office that I've ever worked in provided free coffee, and half of the office would still regularly pick up coffee from the nearest Starbucks daily. I think there's something to be said for
1) Crafting the "image" of superiority that people get from purchasing Starbucks (having that nice branded Starbucks cup, rather than the crappy styrofoam one your office provides, allowing people to order ridiculously tailored drinks -- soy half caff with a dollop of creme...etc) and
2) Providing an ecosystem to encourage the purchase over free alternatives (I've noticed that I'll stop at Starbucks for a snack because I'm hungry in the morning, and pick up coffee/tea as well, just because I'm there)
Yours is a good point (and I can't fully refute it), but I'd like to point out that the article's argument is that Starbucks doesn't offer a free alternative. Surely if Starbucks offered a free alternative, people would choose it instead, as long as it provided a reasonable number of the benefits the paid version does.
To bring the analogy back around to apps, let's say there was an Instagram app that costs $9 and a notJimstagram app that does something similar for free. Instagram = Starbucks, notJimstagram = your office coffee. Most people would buy Instagram, because Instagram is well known, has a strong brand, etc.
On the other hand, suppose there was the $9 Instagram and the free Instagram. In that case, most people would probably choose, or at least start with the free Instagram.
1) Crafting the "image" of superiority that people get from purchasing Starbucks (having that nice branded Starbucks cup, rather than the crappy styrofoam one your office provides, allowing people to order ridiculously tailored drinks -- soy half caff with a dollop of creme...etc) and
2) Providing an ecosystem to encourage the purchase over free alternatives (I've noticed that I'll stop at Starbucks for a snack because I'm hungry in the morning, and pick up coffee/tea as well, just because I'm there)