EasyCinema

Mon, 19 May 2003 15:01:00 -0400
/economics

EasyJet’s Stelios Haji-Ioannou pushes his yield management techniques into the cinema industry:

It’s a novel system because it depends on the price incentive. At the moment, there is no incentive to book early; it’s entirely untested. But if you make it blatantly obvious that people who book early will pay much less, that can only be attractive. Commit now and it’s 20p. Come back in a week’s time and it’s a pound. Turn up on the evening of the show and it will be five pounds.

And runs into the MPAA (or their UK lapdogs):

I’ve promised them that I will remove the risk to their revenue by paying them a lump sum, somewhere between a few hundred and a few thousand pounds, to screen their releases; that way they get paid even if I turn out to be incompetent. But they’re not budging; they believe that when their $200m blockbuster can be seen for 20p, it cheapens the product.

… it may transpire that what they are doing is illegal. They can’t tell me how much to charge the customers.

This kind of pricing scheme can be taken a long way. How far depends on how people can adapt to it, not on the technology underpinning it.