Industry News | July 1, 2005

Houston McDonald’s Expand Menu With… DVD Rentals?

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Houston-area McDonald’s restaurants have a new item on the menu: DVDs. At 181 restaurants at the city, guests can visit the new "Redboxes" – DVD rental kiosks – where they can check out movies in addition to ordering a Big Mac and fries.

McDonald's, celebrating its 50th anniversary this year, launched the experiment a year ago in Washington, D.C., Las Vegas, and Denver. Recently it added Minneapolis-St. Paul. Now diners in the Houston, the nation's fattest city — at least, according to Men's Fitness magazine — can get McMovies with their McFood.

While customary rental fees are around $4, the burger chain's rentals are $1 per night (credit card only), and the disc can be returned to any McDonald's with a Redbox. Films must be dropped off before 10 p.m. to avoid paying for an additional day.

With the new program, McDonald's is entering an increasingly crowded field for DVD delivery. In addition to video veteran Blockbuster, other outlets for movies — on-demand, Netflix, and other retail outlets — are feasting on an increased demand for the format.

If the nightly rental price sounds too cheap, it is. The restaurants aren't expecting to profit from the service, but to use it to attract more consumers.

"Obviously, they've gotten very good at selling more than hamburgers," says McDonald's critic Ron English, an artist who parodies the company in paintings and on billboards. "My kids don't want to go for the hamburgers; they want the free toy. Now you go and get a DVD; you might as well get a meal. The next day you have to return it and get another meal."

McDonald's promotion campaign says that Redbox fits its consumers' busy lifestyles. The DVD service is part of several new expansion ideas implemented by the fast-food giant to update its look and services. Other forward-looking additions being tested in some markets include wireless Internet access and CD-burning kiosks.

McDonald's will offer the 30 to 40 top-renting DVDs, which reportedly account for 80 percent of rentals nationwide. And, luckily for McDonald’s, last year's "Super Size Me" — a documentary about fatty extremes for McDonald's dining — is no longer on that list.