THAT'S EATERTAINMENT! AS AMERICANS HUNGER FOR MORE ENTERTAINMENT VALUE IN THEIR BRANDS, A NEW BREED OF RESTAURANTS PROSPERS

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Planet Hollywood is in Chapter 11. The Fashion Cafe is passe. America's appetite for theme restaurants is waning, but that hasn't dissuaded Walt Disney Co. Just two weeks ago, the entertainment company's ESPN unit opened a 42,000-square-foot restaurant in New York's Times Square, an eatery where TVs the size of movie screens tower over patrons.

Welcome to the next generation of theme restaurants, where diners do more than gawk at celebrity memorabilia as they eat. The "eatertaineries" are part of a larger trend in U.S. business to give consumers more chances to be entertained as they travel, shop or dine. While static, museum-style theme eateries in the $2 billion industry languish, interactive, entertainment-driven concepts teem with diners.

"There's a difference between theme dining and eatertainment," said Greg Schroeder, VP-senior restaurant analyst with Josepthal & Co. "Eatertaineries are really a new niche. Chuck E. Cheese is the oldest example. But now you have murder mystery dinners, dinner theater, bowling alleys and even movie theaters with good quality food."

BREAKING AWAY

The new generation of theme restaurants is breaking away from the more visual decor-laden eateries. ESPN Zone's first two restaurants are performing well above Disney's expectations, while Dave & Buster's games-for-adults atmosphere is a regional success with 20 locations, most in medium-size cities.

Analysts credit consumer interest to a combination of factors: newness (lots of curious one-timers); souped-up interactivity (state-of-the-art virtual reality and video games); and the year-round variety of TV and sports programming.

There's also one overriding factor: America's craving for entertainment. The current marketplace is commonly referred to as the "entertainment" or "experience" economy, where marketers must offer consumers an experience with every product.

"People are looking for stimulus in everything," said marketing consultant Michael Markowitz. "As Americans, we're plugged into this electronic-driven stimulus pipeline . . . The highs are entertainment and fun. The lows are anxiety -- I have to learn more, I'm not hip enough, I don't know something other people do."

SUCCESS FOR GAP, NIKE

Marketers, too, feel the same pressure and see the same successes in the experience economy -- a phrase coined in a 1998 Harvard Business Review article -- that everyone else sees: The Gap, Tommy Hilfiger, Starbucks Coffee Co. and Nike.

One way marketers have entered the race to entertainment is with the use of celebrities to hawk products and identify a brand.

While the haves have long been pitching goods to the have-nots, the tactic matured over the past two years, said Mitch Berk, president-CEO of Entertainment Marketing. His company has hammered out deals between Kenny Rogers and Dole Food Co.; Tina Turner and Sara Lee Corp.'s Hanes; and Ericsson and Celine Dion.

"Our culture has wrapped itself around the accomplishment of these individuals and so everyone wants to be like Mike," he said. "The tactic of entertainment marketing has become more sophisticated and people now use it not only to create an image, but build a brand."

Call it the Vegas-ization of America, where the mix of food, retail and entertaiment come together for the ultimate customer experience.

"No one talks about Vegas, but it seems to be working," said Malcolm M. Knapp, who owns his own consultancy to the food service business. "It's not just casino driven, it's total package-driven."

MORE THAN ONE DIMENSION

For the new generation of theme restaurants, that package may be the key to longevity. Other eateries, such as Fashion Cafe, Motown Cafe and NBC's Television City, failed because they were one-dimensional -- and many argued the food wasn't good enough to warrant a second visit.

"It's very easy in the restaurant business to get people to try these restaurants, especially when it's put in such an elaborate package," Mr. Schroeder said. "People are curious. But to get them to come back more than once or twice, it comes down to more than just a theme."

The repeat visit is essential, given that the cost to open an eatertainery ranges from $8 million to $20 million, depending on the level of high-tech decor. That may be the reason why some, such as David Copperfield's Magic Underground, Stephen Spielberg's Dive! and Chefs of the World barely left the drawing board.

GAMBLING IN TIMES SQUARE

Still, Disney is convinced its New York gamble will pay off. The Times Square ESPN Zone is the company's third; it opened one in Baltimore 14 months ago and another in Chicago this July. Disney plans to open two more in Atlanta and Washington, D.C., in 2000.

The Baltimore unit has so far exceeded expectations. Executives claim 1 million people visited the restaurant in the first year, more than double company projections. Disney believes it has discovered the perfect recipe for theme dining.

Mix ESPN brand power with high-quality food, games, sports viewing, plus a working production area for ESPN anchors, and it adds up to a classic Disney experience, said Art Levitt, president of Disney Regional Entertainment.

"All of it works together in one big entertainment concept," he said. "It's the

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