Soon, a trip to your neighborhood McDonald's (NYSE: MCD ) might include picking up a new release to pop into the DVD player for the evening's entertainment. According to USA Today, the fast food giant is continuing to test kiosk DVD rentals in all its Denver stores.
McDonald's has already been testing locations in Las Vegas and the Washington area, which the article described as having had a "huge response," leading to this new test.
We know that McDonald's has been putting the gold back into the Golden Arches. A lot of the success has had to do with a new flexibility on the menu, including healthier options like salads to complement the traditional Big Mac, and sacking the Super Size.
However, it's no secret that McDonald's is trying to increase reasons to stop in, principally through entertainment and tech. We recently reported that the company is expanding its Wi-Fi presence, as well as considering music downloads.
According to the article, the DVD rentals wouldn't be intended to make McDonald's money -- they'd be more of a play for the patronage of busy families who don't have time to make stop after stop after stop in the evenings.
If this underlines anything, it's the pain of stand-alone video stores like Viacom's (NYSE: VIA ) Blockbuster (NYSE: BBI ) and Hollywood Entertainment (Nasdaq: HLYW ) . (One could argue that as soon as the compact and easily portable DVD hit the scene, it was probably time to foresee change.)
After all, Netflix (Nasdaq: NFLX ) took the movie rental industry and turned it on its ear by offering a flat monthly charge with no late fees and a mail-order method -- something that would not have been feasible with clunky, bulky, and easily breakable VHS tapes.
However, Netflix may find its chief differentiator is to keep true movie aficionados happy through its wider selection than the corner video store offers. USA Today claims the top 30 DVD rentals in video stores comprise 80% of video rentals, which is exactly what McDonald's would offer.
Therefore, McDonald's kiosks could hit Blockbuster and Hollywood where it hurts. McDonald's has 30,000 locations and an estimated 47 million customers daily. Nobody has yet come up with a way to offer dinner and a movie, condensed and at home, and everybody knows our society is all about convenience.
Meanwhile, the flicks can be dropped off at any McDonald's location the next day. And as was pointed out by one of the denizens of the McDonald's discussion board, who can resist a quick snack, a cold beverage, or a sundae upon return? Mickey D's could be on to something here.
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Alyce Lomax does not own shares of any of the companies mentioned.