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Beverage and entertainment retail giants Coca-Cola Co. and Blockbuster Entertainment Corp. are forging a global strategic alliance that could set the stage for a widening web of joint ventures.

The five-year agreement announced last week will put Coca-Cola products in Blockbuster outlets, Discovery Zone FunCenters and domestic Paramount Parks, but more than just soft-drink sales are at stake.

Coca-Cola and Blockbuster marketing brass are mum on specifics, but a co-branding bonanza is expected to follow.

"We've talked about some small promotions and some of the biggest promotions ever run," Brian Woods, senior VP-marketing at Blockbuster, told Advertising Age.

The two companies had been talking for more than a year about teaming up. Mr. Woods said a clause in the agreement allows Coca-Cola to "explore" merchandising apparel and other products in Blockbuster stores but he didn't anticipate any major efforts this year.

Other cross-promotional opportunities on a grander scale are likely, particularly in the entertainment field. Both companies have Hollywood connections: Coca-Cola assigned its flagship account to Creative Artists Agency, Beverly Hills, Calif., and Blockbuster's parent company is Viacom, whose portfolio includes Paramount Pictures Corp.

Blockbuster is "an asset that Viacom wants to fully exploit. It makes sense to partner with other major brand names," said David Davis, senior associate at Houlihan, Lokey, Howard & Zukin, a communications and entertainment investment banking company in Los Angeles.

Viacom has made boosting Blockbuster's brand identification a top priority, Mr. Davis said.

For Coca-Cola, the alliance opens a new channel to not only sell soft drinks but also otherwise promote its brand. The company struck a similar deal with Harrah's Casinos a day after the Blockbuster pact was signed. Coca-Cola will lend promotional support and joint national advertising will be developed.

"Through our relationship with CAA, we can bring major top-of-the-line talent to the table," said a Coca-Cola spokesman, adding that the company has drawn from the talent agency's client list before. Coca-Cola's links to the sports world, including sponsorship of the 1996 Summer Olympics, and free Coke-with-video rental offers were also mentioned as possible tie-ins.

Blockbuster's stay-at-home customers have traditionally been a favorite target for pizza delivery chains. Domino's Pizza last summer co-sponsored Blockbuster's "World Game Championship," providing free pizza and coupons to teen-age videogame wizards competing in Blockbuster's tournament.

Blockbuster's appeal isn't limited to pizza, though. Taco Bell Corp. last fall ran a $12 million ad campaign to promote the two-for-one video rental coupons it distributed in-store.

Coca-Cola hasn't named an agency to preside over any joint marketing ventures. Blockbuster agency D'Arcy Masius Benton & Bowles, St. Louis, is expected to oversee any collaborative efforts. Trahan, Burden & Charles, Baltimore, will handle the Harrah's project.

Jeffery D. Zbar and Jeanne Whalen contributed to this story.

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