Low Cost Cinema Through Dynamic Pricing 385
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."
Understandable. (Score:3, Insightful)
and (Score:3, Insightful)
Excuse me... (Score:2, Insightful)
Easycinema says it is being denied the rights to screen the blockbusters because film distributors are opposed to the company's radical pricing policy.
In short, they don't want to see their big-budget releases being sold for a song.
It's probably a safe assumption that the distributors are in the UK. Nice try at pushing buttons though...it did get your article posted. Next time throw in RIAA and Microsoft for real fun!
You also wrote, "...and their lawyers are reported to be already mounting a case." Really? Where was this reported? Reported by whom? Admit it...you made that part up.
Dominos are cool (Score:4, Insightful)
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.
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.
Ha! (Score:2, Insightful)
The only way to make the MPAA and RIAA listen to customer demands is if there is an all out boycott. No CDs, no singles, no DVDs, no movies, no tapes, no bargain bin, no radio, no downloads, nothing... not one more penny enters their pockets, and not one byte to blame on software piracy. Just like drugs, as long as there is demand, there will be a dealer. Like Nancy said, "Just say NO!"
Re:ticket prices/popcorn (Score:3, Insightful)
Re:Wha lawyers? (Score:5, Insightful)
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.
Here's why the MPAA is not a monopoly. (Score:2, Insightful)
Once again, Slashdot shows it's extreme ignorance about subjects not related to computers.
http://www.mpaa.org/about/
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 expect anyone looking to use the airline industry's business model to turn large profits.
Re:Here's why the MPAA is not a monopoly. (Score:4, Insightful)
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, without condoning the company's actions in other areas.
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:Wha lawyers? (Score:2, Insightful)
Take note: the UK is not the US! AFAIA the MPAA is not involved in any way. Price fixing is illegal in the UK - simple.
EasyCinema will pay the same amount of money to the distributors as any other cinema. The ticket price is irrelevant. And they won't be making more from selling other products, they will be making more by charging higher prices at peak times and filling the cinema at off-peak times. They will save money by having the minimum possible number of staff.
Ultimately, it is likely to have little effect on the big Hollywood studios, simply because they have the power to make sure it doesn't. If it works, it will be good for consumers.
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 waste". Some geek isn't going to get in at all just because these wankers conned their grandpa into going to see it with them. If the price had been $20/seat, then I bet there'd be 3 more geeks in there that night.
On the other hand, it'd also be nice to be able to go see the movie a few weeks after release and only pay $2/seat. Keep the theatre crowded. As the seats start to empty, lower the price and keep it packed. I hate a crowded theatre, but from a profit standpoint, all those people are buying popcorn and cokes. It only makes sense to keep it packed by dropping the price.
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.
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.
Just the beginning... (Score:2, Insightful)
The question is, how long until dynamic pricing permeates more of our markets? Dell tried this for a while with fluctuating prices on its website depending on the demand. People got pissed because they could buy a laptop one minute and the next it was $50 cheaper. Coke was thinking about the same thing, but got slammed by the public when it announced that it was investigating ways to "automatically raise prices for its drinks in hot weather." The article poses the question though: "Consider what the reaction might have been to this headline: "Coke testing machine that automatically discounts prices in cool weather.""
Being an Econ major I get frustrated with supply and demand curves because the truth is, they don't really exist... not in a measurable way at least. Its impossible for me to go out into the marketplace and know the exact equilibrium price for a given quantity supplied. However, we are closer now in history than ever before to being able to manage real time data, especially over the web, in order to dynamically change prices to reach these equilibrium prices. In many instances its just bringing the scalper's market straight to the distributor -- and while everyone complains when you pay $100 for a $50 concert ticket, few see the other side of the coin where you could pay $2 for a theater seat that will otherwise go unused -- however both are circumstances of the free market (surplus and shortage).
Why is payment an issue AND why no concession (Score:2, Insightful)
And another note, easyCinema is not going to have a concession stand, while that does seem to be the model for how they do business - require as few people as humanly possible. Concession stands have such a large profit margin, its not even funny. For example a 35 lb bag of popcorn kernels costs about 10.00 (it is about the size of a medium size bag of dog food) and then a theater can turn around and sell a (large) bag of popped popcorn for 5.00 (or even more, sometimes). A bag of kernels will yeild well over 100 (large) popcorns, so, you do the math. It really does not seem smart to me to discontinue the concession stand all together, maybe things are different in the UK though
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 million on opening weekend"
If they had to track tickets sold, you could see from context that the movie was good/bad/whatever. Example: If you assume that tickets cost $10/ea (in whatever currency you want), and the movie opened to $15 million for the weekend, you can assume that 1.5 million people went to see the movie. In a country of 100 million people, that sucks.
By being able to brag about money, they don't have to acknowledge that fewer people actually see the movies.