MCDONALD'S SEES PREMIUMS HEATING GROWTH

CHRISTINA VEIDERS

BEVERLY HILLS, Calif. -- Fast-food giant McDonald's attributes double-digit growth in home video and distribution over the last four years in part to its controversial marketing of hit sell-through titles as premiums.

In a keynote address here during the Star Power '96 Entertainment Marketing Conference, David Green, senior vice president of marketing for the Oak Brook, Ill.-based corporation, said McDonald's has been able to "create awareness and demand for video ownership unprecedented in the history of the industry." The two-day conference, Jan. 31 and Feb. 1, sponsored by the Promotion Marketing Association of America, and Brand Week Magazine, both based in New York, drew a record turnout of 500 executives from packaged goods, promotional and entertainment companies.

McDonald's began selling value-priced videos, which retail for about $5.99 with a fast-food purchase, five years ago. Past promotions have angered the home video retail community. Retailers charge that such promotions devalue video and may result in unfair pricing structures.

Videos sold as premiums have included Paramount Home Video titles "Charlotte's Web," "Ghost," "Wayne's World" and "Addams Family"; Orion's "Dances With Wolves," and MCA/Universal's "Land Before Time."

But Green told the gathering that McDonald's "strongly believes" that selling videos at over 10,000 McDonald's restaurants has contributed to the 30% average growth in the video industry over the last four years, and to a 25% growth in points in distribution for video sales. "McDonald's has helped to make video tape ownership a part of every family's lifestyle, and we opened the doors to nontraditional video outlet distribution," he added.