The easyGroup has now re-engineered the business of showing films and has removed the frills from going to the cinema
The world’s first no-frills cinema, easyCinema
, is all about going to the pictures for as little as 20p (25 dollar cents/30 euro cents) per movie.
After trying his hand at everything from a no-frills airline (easyJet) to affordable rental cars (easyCar), easyGroup founder Stelios Haji-Ioannou has now re-engineered the business of showing films and has removed the frills from going to the cinema.
Efficiency at easyCinema (the first one is a 10 screen multiplex with 200 seats in each screen, in Milton Keynes, United Kingdom) starts at the box office: it’s been removed. Seats are booked online or by phone (soon to be available on a premium rate line). The earlier you book, the less you pay.
From their own computers, customers print a barcode which they scan at the turnstiles to get into the theatre. There are computers in the cinema itself so that customers can book online while they are there.
Not only did they take away the box office, there’s no popcorn either. If moviegoers want to eat and drink at easyCinema, they have to bring their own (and clean up afterwards!), which is much cheaper than the prices charged by regular cinemas for food and drink.
This high volume, low margin approach should boost bookings: on average, across the whole cinema industry and across all showings, occupancy of cinemas is currently only 20%.
Not surprisingly, easyCinema is experiencing resistance from the main film distributors, who control more than 90% of the market (20th Century Fox, Warner Brothers, Disney, Columbia Tristar, Universal/Paramount). Worried about losing their profitable ‘first week opening’ revenues, and all but one owned by a film studio, these distributors have refused to give easyCinema a film for its first run, in other words on the date that the film starts being shown for the first time to the public.
However, this hasn’t deterred customers. According to easyGroup, the Milton Keynes multiplex has already achieved a 56% occupancy in its first week of operation. Its break even target is 50% occupancy at an average ticket price of GBP 1.50-2 ($2.45-3.30). If sibling easyJet’s success is anything to go by, going to the movies may change for good.Even though not all of easyGroup’s ventures are massive winners, the group’s ongoing yield management and cost-reduction obsessed concepts have the potential to shake-up or even disrupt plenty of B2C categories and sectors. For more on this, see our EASY-ASIA
and MASS CLASS
If you’re in B2C, it would be a revealing exercise to take a good look at your business while pretending you’re Stelios Haji-Ioannou, mercilessly cutting costs and driving volume.And if selling popcorn and soda drinks is what you do for a living, Springwise would recommend opening a store next to any EasyCinema popping up in the near future 😉
2nd June 2003