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Low Cost Cinema Through Dynamic Pricing
cinesprocket writes "EasyJet, the European pioneer of LowCost airline travel has broadened its horizon into the entertainment field. easyCinema is to open tomorrow in Milton Keynes, England, offering cinema-goers cheap rate tickets as low as 20 pence (33 cents) using the same formula that made their airline company revolutionise the industry in Europe. However, according to the the BBC, easyCinema is being given the bird by Hollywood who will not allow it to show it's high cost movies for a low price for fear that it will create a domino effect in the future, like the airline industry has felt (in Europe). Given that easyCinema is willing to pay the movie producers the same price as the other multiplexes, it shouldn't matter what price they sell on the tickets at for we poor folk? Their success depends upon showing the big films and their lawyers are reported to be already mounting a case. Given that the case will be heard in England, where the MPAA have less of a hold on the government, it will be interesting whether they can bring the behemoth to its knees."
They make their money by cutting the overhead:
They also try to get a larger quantity of people: It crazy enough it just might work.This is yet another venture by Stelios Haji-Ioannou, the seventh of his easy* ventures. One of these is easyJet, but he's no longer involved with the management of that company.
Whether or not the parent post gave complete credence to their business plan doesn't matter. Your cut and paste from the fine article does not change the fact that movie theatre profit is generated principally from concessions, and should their model prove successful, others will copy it but won't mind paying the "high cost" of popcorn serving.
It is documented concessions are the principle motivator in the venture of showing feature releases. If there is sufficient demand for popcorn when the bodies arrive, it will be understandable when they will sell popcorn.
The boys presenting this scheme have a good, solid idea which has been used to before by some other industries (e.g., the airlines). Fact is, actual attendance is dismally low compared to seating when you adjust for all times, around 1/5 of the theater seats available. Decreasing price results in increasing attendance; Econ 101 tells you that in many cases the improved attendance will actually result in *more* profits, not less. That is:
Fill 20 seats at $7 each = $140
Fill 50 seats at $4 each = $200
Fill 100 seats at $2.50 each = $250
And so on.
But the MPAA isn't interested in the basics of the free market. What they're interested in is control, pure and simple - and price fixing is one very obvious, and very effective, method of maintaining control. If you can no longer enforce price fixing then you lose one of your more important tools for controlling not only the theaters that run your movies, but also of moviegoers.
How's that? It's really very, very simple: the higher the price the less movies the consumer can afford. Because the consumer can only see x number of movies, advertising can be used to 'herd' the consumer into spending his limited movie income on movies the MPAA chooses to push. The higher the price, the more limited the options, the more likely the consumer will spend his money on something being heavily promoted by the MPAA.
Lower the price and the consumer can now make more movie choices. The consumer, blast his heathen soul, might decide to use some of this disposable income to see movies *not* promoted by the MPAA - perhaps smaller, independent films. The consumer, that communist scumbag, might actually begin to believe that he has a more options - he might even take some of that 'movie money' and spend it on something else! After all, if all he wants to see are two films a month, and they're now half the price that they were, he might spend the other half of the money on something radical, like a book.
Bad, bad consumer!
In any event, remember that the MPAA is at the top of the heap. Like any organization that's king of the hill, change is a threat to the status quo and one that must be quashed regardless of the possible upside. To the invested, change is evil and must be prevented at all costs.
This particular change takes some power out of the hands of the MPAA and puts it into the hands of the consumer. Despite the fact that it would most likely increase overall profits, the loss of power is simply unacceptable and cannot be tolerated. Price-fixing *must* be maintained.
For organizations like the RIAA, the MPAA, or monopolies like Microsoft, profit takes a big back seat to power. The free market is of no interest whatsoever to these folks; in fact, the less free, the better.
Max
My god carries a hammer. Your god died nailed to a tree. Any questions?
No they're not. The MPAA is American. Easycinema is in the UK. I didn't realise that we were offically another american state (although these days it does appear that way).
As for lawyers, well Stelios likes them. As he owns EasyJet, EasyRentaCar and others, he has a nasty tendancy to sue for any domain name that starts with Easy* and Easi*. When ICANN started ruling against him in domain disputes he stopped using it, and starting using the UK courts instead. He's got great PR, but underneath it all he wants his own monopoly on domain names. He finally backed down in the case of EasyArt. You may want to read up at easyprotest2.com and consider if this is the sort of person geeks should be backing.
Ticket prices vary from area to area. It has nothing to do with what the theater wants or what the market will support, at least not directly. It's very rare that the individual theaters get to decide what they charge. Rather, the corporate suits are the ones who decide. There is constant arguing/negotiating between the MPAA members and the NATO members (no, not the North Atlantic Treaty Organization, but the National Association of Theater Owners) over how much to charge for each area.
And the matinee prices don't really matter, since relatively few people see a movie during matinee hours.
Don't bitch about $8. In New York the prices are something like $10. Here in Phoenix, AZ they're $8.50.
I have a hard time believing that there exists a decent theater in a decent-sized town that still only charges $4 for a non-senior/child, non-matinee ticket.
Yes and no, he is trying to get the film manufacturers to sign a fixed price contract so he knows how much to charge but they only want to sign the normal one were they get a share of the takings. Historically this agreement has been good and bad, it HAS ment that poor cinemas and low volume ones could take films they otherwise could never justify. Some cinemas would have never been able to afford the upfront cost (and infact risk). In the days of multiplexs and chains it has also been used laterly to milk big hits. I got to see Matrix reloaded at my local multiplex (I have 2 walking distance from my house) and didn't think that the 3 pounds (4.5 dollars) was alot to pay for my ticket, that would have bought me one pint of Guiness in london and lasted ALOT longer (some might say two long....)
James
I am a foreign student currently studying abroad in Europe, meaning that probably I represent one of easy*'s biggest demographics. I (and all my friends) almost always fly easyJet to travel, we rent easyCar to drive to France or Andorra, and we check our e-mail abroad at easyInternetCafe. easy is the real thing--it's cheap as hell, especially if you book really early. On the other hand the "customer experience" leaves a lot to be desired. For example, in an effort to cut costs even further, easyInternetCafe literally fired all their employees except for about 15 at the home office. No actual easyInternetCafe employees, work in the easyInternetCafes. Which is at once dumbfounding and frustrating. If your computer crashes or the machine eats your money when you try to buy time, well, you're fucked. No recourse. Lots of the computers are broken, people leave their trash laying around, there are always wierdos looking at really sick, graphic porn, and worse, the cafes are unsafe. Twice now I have seen people brazenly mugged, in broad daylight, in nearly packed easyInternetCafes. Similar experiences on easyJet; they farmed out the personnel contract (at least here in Spain) to some company named EuroHandling, whose ticket agents are assholes and unwilling to help you out in any way, especially if you arrive after 40 minutes before departure time. So I'm a little skeptical of easyCinema, even though I'd probably give it a whirl if it came to a town near me. But sentences like "All we ask is that you don't leave any litter behind" sounds like a sweet way of saying, "we're not paying for janitors, please don't trash our theaters." Personally, I'll gladly pay the extra 2 to avoid sitting on someone else's half-eaten nachos, but hey, that's me.
I think there is a world market for maybe five personal web logs.
concessions £3.50, members £3.50, adults £4.50
Weekday after 6pm:
concessions £5.00, members £4.50, adults £5.50
Weekends, Friday after 6pm:
members £4.50, adults £5.50
This is for York City Screen, a Picturehouse Cinema, that shows lots of non-mainstream European and American movies, but also show blockbusters like the Matrix and Lord of the Rings.
Not too much of a rip-off; London prices are exorbitant though, granted. Mostly to do with property pricing I expect.
Though funnily, for ethnic food, London tends to be *cheaper* than north England.
Michel
Fedora Project Contribut