WHILE HALLMARK LEARNS, MCDONALD'S SPURNS

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A year or so ago I wrote about Hallmark Cards' reluctance to branch out into selling home video products, even though its "Hallmark Hall of Fame" TV movies have become a surprise home video hit.

A Hallmark executive explained the company's thinking: "Consumers come to our stores for greeting cards and gifts. We aren't going to transform ourselves into video stores."

To which I asked why not? Blockbuster, for one, is ready to transform itself into just about anything. It considers itself a distribution outlet for a variety of products and services. The name of the company, after all, is Blockbuster Entertainment, and I'm sure it considers greeting cards within its purview.

Now Hallmark has announced it's going into TV production. Its Hallmark Entertainment unit will produce more than 40 network projects this year, including an eight-hour TV movie, "Scarlett," plus it has a commitment from CBS for female-oriented movies to use opposite National Football League telecasts.

So look for Hallmark's next announcement that the company will offer its family-oriented TV shows in home video versions, sold through Hallmark Cards outlets. Could it be that Hallmark is gearing up to do battle with Blockbuster?

If Hallmark has finally realized that it is in the wholesome products business, McDonald's has not. McDonald's continues to see itself as being in the burger business, and has jettisoned just about everything else. "Burgers are our principal business and that is our area of focus," a spokesman told our family newspaper.

McDonald's has sold off its indoor playground chain Leaps & Bounds to Blockbuster's Discovery Zone. Earlier, after a two-year test, McDonald's and Sears closed their McKids apparel boutiques.

McDonald's, I'm sure, would argue that there's still plenty of worldwide growth in the burger business, and they don't want to divert themselves from their central task. In truth, I suspect the McDonald's brass just doesn't feel comfortable in any other business.

And that's fine, but the company is missing some great opportunities to funnel business through those Golden Arches. Blockbuster looks on its involvement with indoor playgrounds as a key entry into a younger market and a way to "grow the consumer" from playgrounds to videos, games and music. McDonald's already owns the youth market and maybe the company felt it didn't need any "feeder" lines of businesses.

But, by not protecting areas where its customers could logically expect them to be, McDonald's is taking a big risk that somebody else will move in. Blockbuster is perfectly capable of putting somebody's fast-food menu in its Discovery Zone play areas and, come to think of it, a fast-food outlet would be a pretty good place to buy a home video or play an electronic game.

By refusing to be in places where its young customers hang out, McDonald's is betting that kids won't work up an appetite for somebody else's burger. That's a bet I wouldn't want to take.

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