http://www.billingsgazette.com/index.php?display=rednews/2004/05/28/build/business/58-mcd-music.inc
McDonald's to give away free music
CHICAGO, Ill. - Who needs Walt Disney Co. when you have Sony Corp. and pop phenom Justin Timberlake?
Probably not McDonald's Corp.
With two years left on one of the most constraining co-marketing deals in recent history, the fast-food giant is looking like a company that is thinking well beyond the House of Mouse.
And with good reason.
Next week McDonald's will announce a huge global promotion with Sony Music that calls for the fast-food company to give away free music through Sony's new online Connect program with purchases of Big Macs.
Roughly 500,000 free songs will be made available. The promotion is expected to kick off during the press event with pop idols Timberlake and Ashanti.
More important, it is the latest sign that McDonald's has suddenly found ways to connect with a younger audience other than relying on the next hit-or-miss movie tie-in with Disney.
Granted, downloads are an easy way to attract an audience these days. As Jim Holbrook, president of promotions firm Zipatoni put it: "Downloads are today's version of phone cards. It's an obvious currency."
But even Holbrook, whose firm doesn't do work for McDonald's, admires the way the company isn't relying on Mickey anymore.
"I think McDonald's has come a long way," said Holbrook. "They've done a good job of moving away from Disney."
Which makes one wonder, what's in store for the next Disney-McDonald's deal - if there is one?
During its annual meeting last week McDonald's revealed that it was having discussions with Disney - with roughly two years left on their current 10-year deal. In fact, a discussion was taking place the day of the annual meeting, executives said.
The fact that talks have already started, insiders said, suggests that there is no way McDonald's will commit itself to another deal that keeps it from working extensively with other entertainment companies.
"There are some things we both like about it and some things we both don't like about it," said CEO Charlie Bell to reporters after the meeting.
Chief marketing officer Larry Light went a little further. "(The relationship) will change for them and it will change for us," he said. "A 10-year partnership is a very long time."
The deal, worth an estimated $10 million at the time, was a gold mine for Disney, giving the film and entertainment conglomerate access to tens of millions of customers in roughly 13,000 restaurants a day.
It also got access, via Happy Meal promotions and other tie-ins, to a lot of McDonald's media money, giving Disney another platform to advertise its movies.
McDonald's, franchisees say, was shortchanged in the deal. With the exception of a McDonald's presence at theme parks, it received little.
At the time the deal was struck in 1996 McDonald's had little choice but to say "uncle."
Burger King had stung McDonald's by doing a tie-in with Disney for Pixar's "Toy Story," draining traffic counts at McDonald's stores for weeks.
At the same time, the fast-food giant was beginning to suffer from flattening sales. McDonald's was on its heels. So it struck a landmark, 10-year deal.
Now, things have changed.
Sales at McDonald's are up. It has Timberlake, and a new ad campaign that appears to be connecting with young adults, and now, a music giveaway tie-in with Sony.
Disney is now the company on its heels. It has a deal to do two more films with the highly coveted computer animation house Pixar, and then all bets are off.
With that kind of leg up, why wouldn't McDonald's want to start negotiations early?
McDonald's to give away free music
CHICAGO, Ill. - Who needs Walt Disney Co. when you have Sony Corp. and pop phenom Justin Timberlake?
Probably not McDonald's Corp.
With two years left on one of the most constraining co-marketing deals in recent history, the fast-food giant is looking like a company that is thinking well beyond the House of Mouse.
And with good reason.
Next week McDonald's will announce a huge global promotion with Sony Music that calls for the fast-food company to give away free music through Sony's new online Connect program with purchases of Big Macs.
Roughly 500,000 free songs will be made available. The promotion is expected to kick off during the press event with pop idols Timberlake and Ashanti.
More important, it is the latest sign that McDonald's has suddenly found ways to connect with a younger audience other than relying on the next hit-or-miss movie tie-in with Disney.
Granted, downloads are an easy way to attract an audience these days. As Jim Holbrook, president of promotions firm Zipatoni put it: "Downloads are today's version of phone cards. It's an obvious currency."
But even Holbrook, whose firm doesn't do work for McDonald's, admires the way the company isn't relying on Mickey anymore.
"I think McDonald's has come a long way," said Holbrook. "They've done a good job of moving away from Disney."
Which makes one wonder, what's in store for the next Disney-McDonald's deal - if there is one?
During its annual meeting last week McDonald's revealed that it was having discussions with Disney - with roughly two years left on their current 10-year deal. In fact, a discussion was taking place the day of the annual meeting, executives said.
The fact that talks have already started, insiders said, suggests that there is no way McDonald's will commit itself to another deal that keeps it from working extensively with other entertainment companies.
"There are some things we both like about it and some things we both don't like about it," said CEO Charlie Bell to reporters after the meeting.
Chief marketing officer Larry Light went a little further. "(The relationship) will change for them and it will change for us," he said. "A 10-year partnership is a very long time."
The deal, worth an estimated $10 million at the time, was a gold mine for Disney, giving the film and entertainment conglomerate access to tens of millions of customers in roughly 13,000 restaurants a day.
It also got access, via Happy Meal promotions and other tie-ins, to a lot of McDonald's media money, giving Disney another platform to advertise its movies.
McDonald's, franchisees say, was shortchanged in the deal. With the exception of a McDonald's presence at theme parks, it received little.
At the time the deal was struck in 1996 McDonald's had little choice but to say "uncle."
Burger King had stung McDonald's by doing a tie-in with Disney for Pixar's "Toy Story," draining traffic counts at McDonald's stores for weeks.
At the same time, the fast-food giant was beginning to suffer from flattening sales. McDonald's was on its heels. So it struck a landmark, 10-year deal.
Now, things have changed.
Sales at McDonald's are up. It has Timberlake, and a new ad campaign that appears to be connecting with young adults, and now, a music giveaway tie-in with Sony.
Disney is now the company on its heels. It has a deal to do two more films with the highly coveted computer animation house Pixar, and then all bets are off.
With that kind of leg up, why wouldn't McDonald's want to start negotiations early?
