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McDVDs Take Minneapolis

13 Jun, 2005 By: Holly J. Wagner

More markets will be gobbling up McDVDs.

Minneapolis-St. Paul will be awash in McDonald's Redbox DVD rental vending machines this week, with two more markets expected to have the machines in all corporate stores by July 1.

If the smell of fries isn't enough to entice consumers, the fast-food giant will offer a free rental to first-time Redbox renters. Ads will tout a code that consumers can type in when they first register on the machines. The machines will recognize unique credit-card swipes so new renters automatically get the first disc for a night. After that, rentals will be $1 a night, just as in Denver.

“This will be consistent in every market that we launch over the summer,” said Redbox spokesman Greg Waring. “The first rental is on us. We're hoping that we'll get a lot of new people with that.”

Along with the expansion comes a redesigned Web site; a full-court media press; new, larger machines; and perhaps the most striking advertisement, 15-foot-high inflatable Redboxes atop high-visibility stores.

“It will be very similar to Denver in that it will be in virtually every restaurant,” Waring said. “It will be more than 140 new machines, all the new Solectron machines with the higher 550-title capacity.” Previous machines from DVDPlay held 100 discs.

The company raised the curtain this week on its new Redbox Web site at www.redbox.com. The site is equipped with a Redbox locator, and McDonald's has partnered with Yahoo to link titles on the Redbox site to reviews and trailers at Yahoo.com.

The company earlier announced plans to put 1,200 kiosks into 10 new markets this year. That starts with Minneapolis-St. Paul. By July 1, consumers can expect to see the machines in Houston and one other market. Waring would not say for certain which market, but likely candidates are Salt Lake City, Utah, and St. Louis, Mo.

Redbox also has fine-tuned rental terms. Rentals are $1 a night, by credit card only, good until 10 p.m. the night after the disc is rented. If a customer keeps the disc, the $1-a-day charges continue for 25 days, expanded from a 21-day period, then rental charges cease and the customer is not expected to return the disc.

Redbox will run new ads on TV and radio and in print. “You are going to see a much more dominant program within the restaurant, full point-of-purchase kits,” Waring said. “The exterior will have strong placement to bring customers in.”

Early next year, the chain expects to test UMD movie titles. “We are definitely excited about it,” he said.

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