McDonald's, Sony Team Up for Free Song Downloads

CHICAGO – McDonald's Corp. (MCD) and Sony Corp. (SNE) Thursday teamed up to give away free music downloads, in a move analysts said raised questions about McDonald's long-standing relationship with Walt Disney Co. (DIS).

McDonald's will launch a U.S. promotion on June 8 offering customers who buy a Big Mac Extra Value meal an access code worth one free song download at Sony's Connect music store. The so-called Big Mac Meal Tracks (search) promotion will run for six to 10 weeks, expanding to Europe in early July, McDonald's said.

Analysts said the alliance, announced Thursday at a Los Angeles news conference, could be a way for McDonald's to tap in to pop culture that appeals to young adults and move away from relying on movie tie-ins with Disney, which is known for its appeal to younger children.

Since late last year, McDonald's has been trying to revitalize its image with young adults. Its "I'm Lovin' It" global ad campaign, for example, incorporates hip-hop music and non-restaurant venues in television commercials that attempt to position McDonald's as a lifestyle company and not strictly a purveyor of fast food.

"I think McDonald's is trying to escape what I call the kiddyland box," said Jack Trout, a marketing consultant who heads Connecticut-based Trout & Partners Ltd. "I think Disney undermines their strategy for moving to the older set."

"They (McDonald's) need to find marketing partners that appeal to that," he said.

The Disney deal was reportedly worth $10 million when it was struck in 1996. It was considered a boon to Disney, giving the entertainment company access to customers in McDonald's 13,000 U.S. hamburger stores.

McDonald's still has about two years left on the 10-year agreement, but the two companies confirmed they are in discussions about the structure of the remaining deal.

A Disney representative stressed that the Disney and Sony deals were unrelated.

"We have an ongoing relationship with McDonald's, and this (Sony deal) has nothing to do with our agreement with them," said Disney spokesman John Spelich.

McDonald's global chief marketing officer, Larry Light, said there will be changes to the McDonald's-Disney partnership.

"It's a good relationship," Light told Reuters. "We're working on terms of the next agreement. They have some ideas and we have some ideas, and it's too soon to tell, but there will be some changes."

But he added: "There will be some kind of a relationship."

Sony Connect, like competing services, lets customers buy songs and download them to portable music players. Users can also listen to songs that have been copied or "ripped" from CDs.

Nearly every major online music store -- from Apple Computer Inc.'s (AAPL) iTunes, RealNetworks Inc.'s (RNWK) Rhapsody to Roxio Inc.'s (ROXI) Napster -- is forming joint ventures with consumer brands ranging from PepsiCo Inc.'s (PEP) Pepsi to UAL Corp.'s (UAL) United Airlines.

Light said that McDonald's had looked at several music providers before solidifying the deal with Sony.

"Sony is the only company capable of doing this on as large and multinational a scale as we wanted," he said.

Shares of McDonald's were up 47 cents, or 1.8 percent, at $26.90 on the New York Stock Exchange Thursday afternoon. Disney shares were off 21 cents at $24.21 on the NYSE.