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Pricing Movies To Demand?
from the will-it-work? dept
I remember when I was growing up that a small theater one town over showed "second run" movies (movies that had been out in the regular theaters a few months earlier, but weren't yet on videotape) for a $1 a shot. It was a good deal when you were a kid without too much disposable income, and also a good way to catch some films that you had missed in their first run through the theaters. It sounds like Stelios Haji-Ioannou (the UK's answer to Jay Walker) may have just accidentally created those same theaters in the UK. He's trying to take the same idea he did with airlines and internet cafés - charging prices based on actual demand - and moving it to the movie business. He's opened his first Easycinema in the UK, which tries to make viewing movies as cheap as possible by cutting out as many expenses as possible. You buy your tickets on the web (the earlier you buy tickets, the cheaper they are), you bring your own food, and you check yourself in. All in all, the plan is to run a 10 screen cinema with just seven employees. The problem? Hollywood isn't happy. The early reviewers of the Easycinema experience aren't thrilled because they're only seeing second run movies. Hollywood is boycotting Easycinema and refusing to show their first run films, which, as the article suggests, might constitute a case of price-fixing. In the meantime, it doesn't sound all that different than the $1 theaters I used to visit years ago.
Reader Comments
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Price discrimination
By keeping prices high, movie theaters can keep out the street trash who spend all day in movie theaters doing who knows what. Hollywood does have a vested interest in keeping the movie theater experience positive. Even at $9 a ticket, there are still too many rude people who come in.
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Re: Price discrimination
That sounds like a business opportunity for higher end movie theaters. Why not open a theater that charges $15 a seat, offers comfy recliners with foot rests, plenty of room, better food, and a nicer overall experience for those elitists among you who don't want to lower yourself to view movies with the riffraff.
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Re: Price discrimination
There already is. There are theaters that charge up to $25 per seat, which comes with waiters and what not; they are known only among the ruling classes. Cineplexes are a compromise for middle class masses who will pay $9 a seat, in exchange for not having to be around e.g. homeless who piss in cups and pour it down the aisle, grinning men who hang around in bathrooms all day.
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Re: Price discrimination
You've forgot about people who talk back to the screen through out the whole movie. I would pay $15 not having to sit with them.
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No concessions = no profits
The article states that the theatre does not sell concessions which is the where most of the profit in a theatre occurs.
He still has to hire somebody to clean the theatres after a show because people will bring in food.
So no profit center and fixed costs remain - good thinking.
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Re: No concessions = no profits
Word. He clearly hasn't thought this out. The majority of ticket sales go to the distribution companies - something like 80-90% of first week sales, and a decreasing amount after that (which is why you'll see one theatre hold onto a popular film for more than half the summer...)
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