McDonald's to launch in-store TV

The channel will push local news in California as a test for a nationwide rollout.

By InvestorPlace Oct 19, 2011 11:35AM

By Jeff Reeves, InvestorPlace.com


investorplaceWant some Little League scores with your Big Mac?


McDonald's (MCD) is adding TV to its menu with a new in-store channel that will feature original content including local news, youth sports and entertainment stories.


McTV will be introduced at select restaurants in California during the next few months, eventually reaching 800 locations. If successful, it could roll out nationwide soon after.


If you’re expecting clever cartoons of Ronald McDonald, don’t hold your breath. McDonald’s has partnered with BBC America and a California ABC news affiliate and has little interest in sharing the responsibility of creating content.

 

What it does want to share, however, are the advertising profits.

 

Post continues below.

It’s not an original idea. Wal-Mart (WMT) has Wal-Mart TV. Numbers from the past few years are simply staggering -- more than 125,000 screens in more than two-thirds of all stores, reaching a potential audience of more than 127 million shoppers per week, serving as many as 150 million ad impressions from sponsors. The profit potential is loud and clear.

McDonald’s is right to embrace this model simply for its reach alone. With more than 33,000 restaurants in more than 100 countries, McDonald’s has quite a platform to serve ads to captive audiences. If the test in California proves successful, expect McTV at the Golden Arches near you.


But there’s also a clear tertiary benefit to an in-store TV network. McDonald’s has been working long and hard to rebrand itself as a comfortable destination, a place to hang out and linger with a McCafe coffee instead of just a drive-through window. McDonald's has revamped store interiors to resemble Starbucks, installed Wi-Fi in many restaurants and continued to make its PlayPlace a popular hangout for parents with children.


Millions of Americans already sit mindlessly in front of the tube scarfing down fast food, so why not encourage them to stick around at the restaurant -- and maybe get an apple pie for the road?


It’s unlikely this push will have any immediate impact on McDonald’s bottom line. McTV is just a test and will take years to roll out even if it proves viable. But after a red-hot run recently -- MCD stock is up 250% since 2004 and has doubled since 2007 -- it’s clear management understands that it has to get creative if it wants to keep up this kind of profit growth.

Will McTV be the next big thing? Maybe. If it's done right, patrons will get some good local content as they wait in line, and McDonald’s can start to get a more local flavor in communities instead of being seen as a global corporate monstrosity.


Of course, if done wrong, it will just be one more annoying bit of advertising that consumers ignore -- irritating diners and pushing them out the door of McDonald’s faster than before.

 

jeff reeves investorplace

Jeff Reeves is the editor of InvestorPlace.com. Write him at editor@investorplace.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. As of this writing, he did not own a position in any of the aforementioned stocks.

 



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6Comments
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To McDonalds: Save the money you would lose installing that crap and  work on food quality and cheaper prices.
Oct 19, 2011 1:37PM
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Great more mind numbing news of which I just read, seen or heard about already! Information overload of useless stories and information I don't want or need or am already tired of. Sounds like more of the same to me.
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Who would have time to watch it anyway, they try to get you out in 15 minutes. No time just to sit, relax and eat a meal anymore.

Oct 19, 2011 3:58PM
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McDonalds tried their TV in 1991.  It didn't work then.  Wonder why they think it's different now?

Oct 19, 2011 3:27PM
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Sorry, I usually go through the drive-thru.
Oct 19, 2011 3:33PM
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how will they recoup the money for all these installations? oh yeah they get contractors to drop their pants on the price then they cram unreasonable schedules at them.Plenty of guys building McDonnalds putting in 50 plus hours weekly for reg pay no OT  and very few have any health insurance .But the the Micky D's rep will get a bonus if they pull it off
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