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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."
The money for the release locations is in concessions. Get the body in the door, then make your dime. Ticket price is not the principle motivating factor in the business model of most theaters, regardless of whether they are first-run mega-plexes or indie houses. SUre enough tickets are revenue, but that's not your profit center when you run a theater.
I sincerely hope that easyCinema appears, enjoys a lot of success, and causes exactly the domino effect that the MPAA fears. I want to see movie prices come down, and more importantly, I want to see this change affect the music industry as well. Finally, I hope that such a powerful domino effect causes laws like the DMCA to get taken out of the books.
If, like most /. readers, you follow[ed] the myriad Microsoft court cases (or browse practically half of the YRO section) you'll remember that there are some things that ordinary companies can do that monopolies can't.
Normally a company can decide who it wants to do business with. That's just common sense, not to mention an important facet of the free market. A monopoly, on the other hand, by virtue of being the [near] sole provider of a resource cannot be allowed that luxury. To make a borderline facile analogy: Suppose a pharmaceutical company developed a cure for cancer, and cornered the market on same. Also assume that have, for our hypothetical purposes, a near-infinite supply of same. Would we allow that company to refuse the cure to certain people, even if they were willing to pay the specified price? Obviously, this isn't an exact analog to the situation (this situation would probably be brought under charges of discrimination, rather than monopolism), but it servers the purpose.
Is the MPAA a monopoly? While I'm sure a large percentage of Slashdotters have a very strong opinion on that subject, ulitmately it remains for the courts to decide.
The courts are involved because the film distributors are creating a monopoly that keeps ticket prices artifically high. You could probably accuse the cinemas of operating a cartel also. easyCinema are prepared to pay the going rate to screen the movie but are going to allow the ticket price to be determined by market forces. However they are prevented from doing so because a monopoly is profiting from the exclusion of market forces. Therefore this is a case for the courts (in the UK and other EU countries) because consumers are impacted.
Interesting link, as well. It also brings up an interesting problem; when you hate both sides, who do you root for? Stelios may be a total wanker, but I'm gonna' pick price-fixing over domain-name squabbling as the greater evil. That's a judgment call on my part, YMMV.
More like a cartel, then.
Too busy staying alive... ~ R.A.
blowdart wrote: You may want to read up at easyprotest2.com and consider if this is the sort of person geeks should be backing.
True, but we should also be able to move beyond tribal politics and recognise that we can support someone on one issue, and oppose them on another.
There's a wide variety of views here at Slashdot (though it's sometimes tempting to assume everyone thinks the same), but many here don't have much time for abusive monopolies. It's entirely consistent to support easyCinema on this, without condoning the company's actions in other areas.
easyJet works because, for the large majority of people (i.e. everybody who has been on a plane at least once before and aren't in >= Business Class), flights are an enormous pain in the ass and only serve as a means to an end (get to where they want to go). Their pricing model is reasonably transparent and you know what you're getting in terms of service (not a lot).
Whereas the traditional carriers have hideously arcane and obscure pricing models and clearly are charing way over the odds for flights. The cats out of the bag on that one.
Transpose this to the cinema industry and you find that it doesn't work. People *like* the cinema experience; the upturn in cinema attendance after the collapse in the late 80s (at least in the UK) was due in part to the far higher quality of cinema experience (pleasant environment, better seats etc etc). Going to the cinema is not just a means to an end, it's an end in itself.
In any case, 'going to the cinema' is right up there in the top 5% of 'impulse activities'. No one is going to book 10 days in advance for a film. Personally speaking, I can seldom decide which film I'm going to see until 10 minutes before it starts. :)
Please remain calm, there is no reason to pani... wait, where are you all going?
The economic model that Stelios is trying is called penetration pricing. You sell at a loss, capture the market and then you jack up the prices once there is no competition. In the US where antitrust law is weak that is legal unless you are a monopoly. In the UK it is illegal regardless.
There is a lot of ownership overlap between distributors and cinemas, but that has been invesigated by the monopolies and mergers commission and ok'd.
It is not very likely that a UK court is going to decide that the distributors have no rights over the type and quality of the venues where their films are shown.
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