Inside Move: McDonald’s eyes new meal ticket in DVD biz

Each store to be kitted out with 300-disc kiosk

McDonald’s is changing its menu again, and the fast food chain may soon be eating Blockbuster’s lunch.

Along with salads and low-cal Happy Meals, the Golden Arches last week started serving up DVD rentals in 100 of its Denver area outlets.

As part of a regional trial, each store is being kitted out with a kiosk that can store up to 300 discs and some 30-40 current-release DVD titles rentable for a buck a night using a debit or credit card.

McDonald’s entry into the home entertainment market is still in the early stage but its incursion into a space dominated by rental chains Blockbuster and Hollywood Video and mass market retailers like Best Buy and Wal-Mart could shake up the balance of movie retail power.

Many companies are looking for ways to rejuvenate the rental market not least of all Blockbuster. The chain announced last week it hopes to rev growth by rolling out its own national in-store subscription service. Priced at $24.99 a month, the unlimited-disc offer will soon be extended into an online subscription service a la Netflix.

Both of those companies say convenience and value will keep rental alive. McDonald’s already knows a thing or two about convenience.

“Satisfying new demands delivered at the speed and value of McDonald’s is a fantastic way to leverage what McDonald’s does best,” says Mats Lederhausen, managing director of McDonald’s Ventures.

If the burger chain gets the DVD formula right, not only will it have found another way to lure customers back for more shakes and fries (or salads) but a whole new revenue stream.

McDonald’s has 30,000 outlets that serve a whopping 47 million people daily across the globe, making Blockbuster’s 8,900 stores look kind of puny.

That kind of traffic could have Blockbuster wondering if its customers might like fries with that rental order.

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