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Low Cost Cinema Through Dynamic Pricing
Posted by
michael
on Sat May 24, 2003 12:06 AM
from the pack-'em-in dept.
from the pack-'em-in dept.
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."
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Based on Slashdot profiling (Score:5, Funny)
Re:Based on Slashdot profiling (Score:3, Insightful)
Wouldn't it be nice to get in to see LOTR part 3 on opening weekend without having to deal with people who weren't really dedicated to seeing the movie? I stood in line behind two 13-year-olds who spend like 3 hours tryiong to explain the first movie to their grandpa. The whole time i was thinking "what a w
And outside London (Score:5, Informative)
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 [picturehou...emas.co.uk], 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.
Parent
Wha lawyers? (Score:5, Interesting)
Re:Wha lawyers? (Score:5, Insightful)
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.
Parent
Re:Wha lawyers? (Score:5, Informative)
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 [theregister.co.uk]. You may want to read up at easyprotest2.com [easyprotest2.com] and consider if this is the sort of person geeks should be backing.
Parent
Re:Wha lawyers? (Score:4, Insightful)
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.
Parent
Re:Wha lawyers? (Score:3, Insightful)
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, w
Re:Wha lawyers? (Score:4, Insightful)
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.
Parent
Re:Wha lawyers? (Score:3, Insightful)
Because, this affects the movie studios and their pissing contests as to who had the largest weekend opening. They don't brag about "50 million people saw our movie!" They brag about "$200 millio
Re:Wha lawyers? (Score:5, Informative)
James
Parent
Re:Here's why the MPAA is not a monopoly. (Score:4, Insightful)
Parent
Re:Wha lawyers? (Score:5, Insightful)
Parent
Re:Wha lawyers? (Score:4, Interesting)
Even if easyCinema offered to make up for the difference in ticket price (which they aren't; they're just saying they'll pay the same amount for the right to show the film as the other theaters, which is very small compared to the film's actual budget), easyCinema's price for everything else (candy, drinks, etc.) would skyrocket (why do you think theaters charge so much already? When you only get 50% of the ticket price, you've got to make your money elsewhere).
Typically here in the US, the distributor gets 50%, and the theater gets the other 50%. The distributor then takes their 50% and divides it up amongst all remaining parties according to their contract(s) with said remaining parties.
And the MPAA isn't a monopoly. It doesn't make movies, it doesn't distribute them, and it doesn't advertise them, therefor it can't be a monopoly. The whole point of the MPAA originally was to be a non-governmental regulatory force (here in the States, it's the MPAA that gives the movies their (voluntary) rating; it was also the MPAA that decided the dispute between New Line Cinema and MGM over the name of Austin Powers: Goldmember), but its purpose has been extended a bit since then.
What's more, the member studios compete against each other, and none of them are monopolies.
If ordered that since they allow other theaters to exhibit their films they must also allow easyCinema to, it could be very likely that the major Hollywood studios would simply not distribute their films in theaters at all, since they don't make much money in the UK anyway (even non-fluff, non-action films make only a few million in the UK).
Ultimately, I think that this will hurt everybody: the big Hollywood studios, the UK studios, and the independents, since 50% of a 33 cent ticket price is only 16.5 cents. At that rate, even if everyone in the United States (population is approx. 280 million) saw a film, it would only pull in 46.2 million. And since the percentage of any country's population that see a particular film is incredibly small, films would make far less.
But how would this hurt the moviegoing public? Simple: far fewer films will get made (if any), they will be much shorter, and of far lower quality.
Parent
Re:Wha lawyers? (Score:3, Insightful)
I don't know how things are over there, but here in the US people seem perfectly willing to pay $8.50 for a ticket. As an example, The Matrix: Reloaded made $134 million during opening weekend.
When it comes to concessions, I wasn't just talking about easyCinema, but rather to theaters in general.
But as others have said, you shouldn't e
MPAA (Score:4, Interesting)
It makes me angry to even think about any meddling from MPAA part on british, or any european film avenue for that matter.
Understandable. (Score:3, Insightful)
Re:Understandable. (Score:4, Informative)
Parent
Re:Understandable. (Score:5, Informative)
It [howstuffworks.com] is [thedesertsun.com] documented [didntialre...smovie.com] 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.
Parent
Re:Understandable. (Score:4, Insightful)
I disagree. I was visiting in Texas when X-men came out. Saw it in a first run, nice theater in the Dallas area. Matinee tickets were 2 bucks for an adult, Saturday evening tickets were $4. Back here in North Carolina the same tickets were $5.75 for the matinee show and over $8 for the evening show. Clearly the local theater was charging that to make extra profits, and their concession prices are so high that most people avoid them. Other local theaters (different chains) charge similar prices.
Parent
Re:Understandable. (Score:4, Informative)
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.
Parent
Re:Understandable. (Score:5, Informative)
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.Parent
and (Score:3, Insightful)
pricing (Score:5, Informative)
First week, distributor gets 90% of the ticket sales, theatre gets 10%
Second week, distributor gets 80% of the ticket sales, theatre gets 20%
etc.
The only way a theatre can make money is if the movie is so popular people want to see it 2 months later (star wars (original one!)), or by selling overpriced popcorn.
Re:pricing (Score:5, Informative)
Parent
Re:pricing (Score:3, Informative)
How exactly do you propose that filmmakers recoup their costs? Especially independent filmmakers, who don't have a large studio backing them up with product placements and toys and deals with McDonalds?
They'd still get paid for the rights to show the film, just via a different system. In fact, the new system could be *better* for independents, since the current one means they get next to nothing if their film flops.
And I don't think this idea would work well in the US. Over here, people want service.
just to point out (Score:2, Informative)
Just imagine... (Score:3, Interesting)
Re:Just imagine... (Score:5, Interesting)
So although it costs more, and I feel like a snob going, it actually becomes more reasonable everytime I see a movie at the *regular* (coach?) seating... Before the Matrix was 30 minutes of commercials, 5 (!?!) movie previews (1 good 4 crap), and waiting for the movie to start (before the lights dimm) there were slideshow ads on the screen...
Paying first class is certainly worthwhile, just to avoid all the advertisements!
_CMK
Parent
Premium Cinema in Framingham, MA (Score:3, Interesting)
To be fair, they share the lot with the Multiplex that is part of the same building, but when I asked managment "Where are the cameras for the parking lot?", they said "The landlord won't allow them." I called the landlord and they said "What? They can have cameras if they want. I
Dominos are cool (Score:4, Insightful)
Why not? (Score:5, Interesting)
So what if the lowest possible ticket price is 33 cents? it's just like booking a really cheap flight.. teh cheapest one being the 3 a.m flight which you have to book 6 months adead for.
Why not have it like in a real theather, where the better seats, say smack right in the center, are more expensive then the left most seat in the front row?
You get to advertise cheap and you have the option of paying less for a crappy seat.
Re:Why not? (Score:3, Funny)
when the ads start, I pull my shirt over my head, and plug my ears.
I'ts not 100% effective, not even close, but it's I kind of see those ads the same way as I see spam.
the screen's to big to ignore,
and you can't show up late and get a good seat.
plus it has the added bonus of confusing the people next to me...:D
Correction -- not really connected with easyJet (Score:5, Informative)
Finally, this is on-topic! (Score:5, Funny)
2. ???
3. Profit!!!
Tell me again why people who think the airline industry is a good place to turn a profit have a viable business model here?
Re:Finally, this is on-topic! (Score:3, Funny)
2. ???
3. Profit!!!
You may ask: How do we make money selling the tickets at a loss? The answer is simple:
Volume!
(Apologies to SNL)
the best way to make money (Score:5, Funny)
but to sell those super duper jumbo sodas really cheap
seriously the only time you ever have to pee worse than when you wake up in the morning is right after sitting through a movie in the theatre, or is this just me?
Show films from independent filmmakers (Score:3)
Airline business model? (Score:5, Funny)
-Elentar
it's not about price.... (Score:5, Informative)
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
Multiplex history (Score:4, Interesting)
Incidentally, Milton Keynes is also home to probably the world's only herd of concrete cows [concretecow.com].
Comfy chairs? (Score:3, Interesting)
nah sorry i'm all for cheaper ticket prices - but hell, go to the prince charles cinema in soho if you want cheap prices. most films there are only £2 per screening, and you can buy tickets at the box office - no need to go out and buy a printer just so you can print out your internet issued bar code.
bollocks to that.
also, i am in bulgaria right now and paid a grand BLV5 (= approx £1.80) to see the matrix reloaded, in english with bulgarian subtitles, in a pretty decent cinema. in the UK the cinemas in leicester square charge around £10 = £12 per ticket last time i looked, and you have been able to buy them online too for years. only you don't have to print out a stupid bar code, you just turn up, stick your credit card in the slot and it spits out your tickets. incidentally this is how BAs online flight tickets work and it rocks. you buy your tickets online and just turn up to the airport, stick your card in the slot and use the touch screen to choose your seats, answer the basic security questions and it spits out your boarding passes. then you just hand over your bags at a special desk reserved for e-ticket holders and bingo you are off. takes less than 5 minutes usually.
all easycinema will do it force real cinemas to cut costs and that's a good thing for consumers. but only kids or the homeless would put up with their special brand of easyservice. on given this willl be a staff-free cinema i expect the kids and the homeless will get on just fine - trading glue and drugs for wood alcohol</opinion>
Re:Comfy chairs? (Score:3, Offtopic)
Getting out to LHR or Gatwick from central london is like a £3.50 tube ride, or if you want you
A miscalculation, I think (Score:4, Insightful)
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. :)
Re:A miscalculation, I think (Score:3, Funny)
Hold on there, boss. You're posting to a crowd who's planning on camping out at least twice that long to get the first ticket to the next Star Wars flick.
Not necessarily cheap... (Score:3, Interesting)
At the risk of pissing in the wind here... the answer to quite a few questions that are above this are in the article.
Those confused by the viability of the business model: NOTE: Not *all* the tickets will cost 20p. In fact, probably relatively few. As the article says, you could actually pay 5 pounds, which is more than my local cinema charges now. Sure, the tickets will be on average cheaper but this 20p thing is clearly an advertising gimmick. And as such it seems to be working so far.
I wonder how succesful this will be. Flying, if the experience as a whole is reduced in quality is fine; its a functional activity getting from A-to-B. (EasyJet=no "free" inflight snack or drink, no "free" papers, the crews do the cleaning etc, you are herded on, you are herder off) You don't fly for the sake of it. Going to the cinema on the otherhand is about more than the film itself. Depending on how far corners are cut (maintenance, technical specs of equipment, cleanliness etc.) it might be a bit unappealing as something you might do for the sake of it.
Personally I welcome this if only because I can grandly goto a more expensive cinema round the corner and be able to watch in peace without rowdy teenagers annoying me. All for a few extra quid. Seems like a bargain to me. Everyone will be happy
easy* is a mixed blessing (Score:5, Informative)
Good idea for filling empty seats (Score:3, Insightful)
It really makes no sense that all movies at a given cinema are for the same price, whether it is an opening day blockbuster or a mediocre film in its last week. It is nothing but price-fixing by the motion picture cartels that causes ticket prices to defy the laws of supply and demand.
This one guy's mistake is that he could increase his profits by selling popcorn and other food and beverages, given that the lower ticket prices would increase the number of people and the amount they are willing to spend on refreshments. Concession stands are profit centers, not costs to be minimized.
Re:33 cents-there has to be a catch (Score:5, Informative)
Parent
Re:ticket prices/popcorn (Score:3, Insightful)