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Consumers Eat Up Dinner-Movie Tie-In

13 Sep, 2004 By: Holly J. Wagner

As promotions, pairing video with food is nothing new. McDonald's, Burger King and other fast-food restaurants have long offered kids meal toys with movie and video themes. Pizza Hut has offered select MGM discs with its pizzas in limited-time promotions. In June 2003, in connection with the release of Agent Cody Banks, Pizza Hut offered a choice of four MGM titles to customers ordering a large pizza at menu price. The discs included about 20 minutes of promos for other MGM titles.

Dinner and a movie is an increasingly popular business model, with pizza apparently in the lead as the complementary food of choice.

“When we ask our operators what the best retailer is to have next to them, video is the No. 1 next-door neighbor,” said Ron Berger, former Rentrak and current Figaro's Pizza CEO. “Video rental consumption is primarily occurring in the evening and weekends. Pizza consumption is the same thing.”

For pizza purveyors, the synergy extends to site selection.

“We have even had cases where a video store operator next door goes out of business, and our operator goes out and buys a video store and puts it in,” Berger said. “It's not common, but some of them are willing to ante up to own their own video store.”

Once DVD came in, video store operators knew they would eventually need less floor space and looked for complementary businesses to make use of the extra room, said John Burrell, a former Blockbuster franchisee whose The Button Pizza Co. franchises 20 Papa Murphy's take-and-bake pizza shops.

“For several of our sites, the tenant next door is a Blockbuster or Hollywood store,” he said. “There is a lot of commonality. We both serve families with children.&quo;&quo;Children drive a lot of video consumption, and they also drive a lot of pizza consumption,” Figaro's Berger said.

“The family will rent a DVD and then have a pizza at that time,” Burrell said.

Papa John's is one of the chains testing the disposable EZ-D discs in the markets that have it. The chain also launched a nationwide “Pizza and Entertainment” campaign May 3, offering customers one of three standard DVDs with the purchase of a large pizza at regular menu price.

One thing that makes the pairing popular for pizza purveyors is that it lets them offer added value without devaluing their bread and butter — er, crust and sauce.

“The pizza category has trained people to look for what is the best deal out there. We spend a lot of money on better ingredients to make a better pizza,” Papa John's CFO John Flanery said. “The DVD helps the consumer feel like the regular price is a good value,” Papa John's CFO John Flanery said.

It's a chance for suppliers to get the product in front of people who might not find it otherwise. The Rocky & Bullwinkle EZ-D disc Papa John's offers includes three episodes from season one, plus directions sending consumers to the Classic Media Web site for promotions, contests and merchandise.

“This gives us an opportunity to take one of our core brands that is still considered a classic but is an older program and promote the brand to a new audience,” Classic Media CEO Robert Mayo said. “We are giving away minimal content and exposing our DVD releases to millions of eyes.”

Many video and pizza chains offer corporate incentive programs, so vendors of other goods can offer coupons good for video discounts and free rentals. For the rental chains, one benefit is that folks who redeem coupons must sign up for rental membership to use the coupon.

Vending machines are making it easier for a number of fast-food chains to get into the video rental business. McDonald's installed DVDPlay's vending machines in all of its Denver stores in May and has just begun its TV advertising campaign promoting $1-a-night rentals. For the chain, DVD rental is a traffic driver to sell more food.

“For McDonald's, it's all about innovation and finding ways to meet our customers' needs. Denver has the highest viewership of DVDs,” said McDonald's spokesperson Kelly Hoyman.

Sheetz, a convenience store and restaurant chain based in Altoona, Pa., launched its new restaurant concept in June. The test stores include video rental from a selection of 100 titles in vending machines, wireless access and, in the flagship location, five big-screen TVs.

Classic Media offered its “Rudolph the Red-Nosed Reindeer” titles for sale at Del Taco stores during the 2003 holidays. “These DVDs are an impulse, and if we put them where people aren't used to seeing DVDs, maybe they will buy them,” Mayo said.

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