Blockbuster Entertainment Group and NationsBank Corp. announced plans Tuesday for one of the biggest and glitziest cobranded credit card programs.

Offering a package of rebates, low introductory interest rates, and incentives to use Blockbuster products and services, the company expects to attract customers from its data base of millions of video-rental customers and through mass advertising.

Making its boldest move into cobranding, NationsBank will be responsible for issuing the Blockbuster Visa cards, holding the receivables, and executing a marketing campaign involving millions of direct-mail solicitations.

Blockbuster, part of the Viacom Inc. media conglomerate, will be advertising the card nationally. A television commercial featuring spokeswoman and supermodel Cindy Crawford will premiere next Monday - Academy Awards night - by which time millions of preapproved card applications will be in the mail.

"Blockbuster dominates the category in terms of video rentals," said G. Patrick Phillips, NationsBank president of financial products, at a press conference in New York. "We think it will be extraordinarily well received" in the credit card market.

"This is the biggest (card product) launch for NationsBank at one time," he said. Mr. Phillips is a director of Visa International, which also gets a big boost from Blockbuster's branding choice.

Because of a rules dispute in the early 1990s, Visa ceded the burgeoning cobranding market to its rival MasterCard. Now back in the game, Visa has scored several "wins" over MasterCard cobranding proposals in the petroleum, retailing, and telecommunications markets, but NationsBank- Blockbuster is likely to beat them all.

"This program opens a new category in cobranded cards - entertainment," said Eileen M. Friars, president of NationsBank Card Services.

Pointing to cross-marketing potential that could go far beyond elements in the initial package - these include discounts on the Showtime TV channel and at Paramount theme parks, also Viacom properties - Visa U.S.A. president Carl Pascarella said the alliance can create future opportunities on the information superhighway.

"This focuses on entertainment and changes the paradigm for cobranding," he said.

Ms. Friars said Blockbuster Visa could surpass the 600,000 cards issued in the NationsBank-USAir program, but that may be conservative. Other experts say Blockbuster's marketing power - 4,000 store locations, one billion customer-visits a year, and a 50 million-consumer data base - should generate millions of cardholders, though perhaps not the 10 million or more signed by AT&T and General Motors.

Mr. Phillips said reports that Blockbuster and NationsBank will make up to 20 million direct-mail solicitations are somewhat exaggerated. David Robertson, president of The Nilson Report in Oxnard, Calif., projected up to three million Blockbuster cards will be issued within three years.

"In research, entertainment comes up very high on the list of consumer needs - entertainment, benefits, and fun," Ms. Friars said. The Blockbuster Visa will give them that.

"This will be more successful than oil company cards. It is more fun to watch movies than pump gas."

"The value of the card can be limitless," said Steven Berrard, president of Blockbuster Entertainment Group. "We think Visa is a good match; it is thought of as a travel and entertainment card in addition to other values it offers."

The card will earn consumers 5% rebates on all purchases at Blockbuster Video, Blockbuster Music, Discovery Zone FunCenters, and Paramount Parks locations. Purchases elsewhere are credited with 1%. Blockbuster Bucks, in $5 increments, will be attached to monthly statements.

In a cause-related marketing wrinkle, a portion of the proceeds from the card will be donated to the End Hunger Network.

Some analysts say spiraling interest rates and direct-mail overload might work against Blockbuster Visa.

"No one has really launched a major cobranded card in the high-interest- rate environment," said Robert McKinley, president of RAM Research Corp. in Frederick, Md.

An introductory rate of 9.5% holds for the first six months and rises to 9.9% over prime thereafter. In comparison, the new Southwestern Bell Visa offers 5% back on monthly phone bills, 1% back on general purchases, and a teaser rate of 7.9% that climbs to 6% over prime.

Mr. McKinley said Blockbuster "certainly has potential with that size of a (direct mail) drop." But he added, "It's not the same market" as a few years ago.

Although the company is making it "sweet on the rebates, these are not big-ticket items," said Mr. McKinley. "I wouldn't consider it a blockbuster."

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