In what likely is the biggest deal yet since Turner Broadcasting tried to develop an ill-fated place-based video network with McDonald's in the early 1990s, Taco Bell has agreed to install an ad-supported video network throughout its 5,600 locations nationwide. The deal with Indoor Direct will provide free Wi-Fi access to diners, a move that is expected to convert many drive-through customers into in-restaurant dinners, and boost the amount of time and items they order in the restaurants.
The deal is a boon for Indoor Direct, which is focused exclusively on building out a network of quick-service restaurants, and currently has a base of 1,036 locations, mostly franchisees of big chains including Denny's, Carl's Jr., Hardees, and Wendy's. The addition of Taco Bell's 5,600 locations, which are expected to be fully installed by 2015, will reach about 48 million customers each month.
It will also transform Taco Bell's restaurants from a simple dining experience into a multimedia advertising platform, including large silent video screens at the cashier lines, and even bigger screens with audio in the dining areas, as well as Wi-Fi, which will include opening browser advertising avails for brands who want to sponsor it.
Currently, Indoor Direct's advertising roster includes financial services brands like Discover Card, and entertainment brands such as Turner Broadcasting, Fox, and Sony Television.
The content mix on Indoor Direct's Restaurant Entertainment Network is similar in format to conventional television, featuring snippets of lifestyle, entertainment, sports, and music programming provided by blue chip content providers such as the AP, the NFL, the PGA, NASCAR, and the major record labels. Restaurant patrons are expected to a mix that includes about 70% content and 30% advertising, and Indoor Direct's most recent Nielsen research indicates the average patron spends about 25 minutes watching its programming.
Indoor Direct executives said they did not have research on what the impact of offering chain-wide free Wi-Fi to Taco Bell's customers might do to average dwell time in the restaurants, but they said they expected it to increase and that the more time people spend inside fast-food chains, the more likely they are to purchase more products.
The Wi-FI isn't just a value-added gimmick, but is an integral part of the Restaurant Entertainment Network's programming, many elements of which enable users to interact with content to play games, enter polls, and even download content, such as songs from iTunes.