Now playing in Milton Keynes, a one-horse commuter town about an hour outside London: an epic business-action thriller. It has intrigue. It has suspense. It has lawyers. Will the headstrong immigrant strike it rich (once more)? Will corporate behemoths steamroll a threatening upstart? And can moviegoers find happiness in a theater that doesn't sell popcorn?
Stelios Haji-Ioannou is at it again. He has made a fortune with easyJet, an eight-year-old airline that offers dynamically priced discount fares: Simply put, passengers pay less for a seat the earlier they buy. He has applied the same formula, with varying degrees of success, to car rentals, credit cards, and Internet cafés.
Now Stelios (he's universally known in Britain by his first name) is targeting another grossly inefficient business. The 36-year-old entrepreneur calculates that 80% of cinema seats never see a bottom. Hence, easyCinema, a 2,000-seat, 10-screen complex that Stelios christened in May. At most chains, film buffs pay the same $8 to see a B-picture dud on a Tuesday night as they would for a Saturday night blockbuster. In Milton Keynes, Stelios applies the same yield-management formula that made easyJet soar. Tickets start at about 30 cents and rise with demand, rewarding patrons who book in advance or enjoy off-peak screenings.
Stelios is also holding down costs. EasyCinema operates with a staff of seven and sells tickets only online. Customers pass through turnstiles with bar-coded membership cards they print from the theater's Web site. Overpriced popcorn? Not here. Filmgoers bring their own snacks (a nearby McDonald's does brisk business before showings) and are told to take their litter with them ("Your mother doesn't work here!" scolds a poster).
The scheme has generated enormous public support — Stelios is a master of PR — but not much business. In its first week, easyCinema filled 56% of its seats, but patronage has dropped steadily since. The problem: Britain's big movie distributors. Six of them, including Disney's Buena Vista International and Columbia TriStar, own 90% of the UK market. Stelios says none are playing ball with him.
Traditionally, distributors make money by creaming a high percentage of box-office revenue in the first weeks of a film's run. Instead, Stelios offers them a lump sum. No one will say exactly how much he's paying, but an industry insider says it isn't enough for distributors to take the risk. What's more, the big players worry that easyCinema's formula will cheapen their offerings: Why pay full fare to watch Pirates of the Caribbean when it costs 30 cents at easyCinema?
"I'm used to a fight," says Stelios, "but only with competitors, not suppliers." For now, the only movies he gets are second runs or lame ducks. The closest easyCinema has come to snagging a new release was Charlie's Angels: Full Throttle, and that was weeks after it first appeared at the Xscape multiplex across the street.
Will there be a happy ending for our hero? Though it's losing money, Stelios says, "I can fund easyCinema for decades." In July, he sold $27 million of easyJet stock to shore up his fighting fund. And Stelios is trying to persuade Britain's Office of Fair Trading to investigate what he alleges is illegal collusion and resale price maintenance among distributors.
But Stelios will be hard-pressed to prove the distributors are behaving illegally. So while he imagines that easyCinema will someday blossom into an international, publicly traded company, he's also hedging his bets. Over the next year, he'll launch a no-frills cruise ship (easyCruise), a hotel chain (easyDorm), transportation (easyBus), and fast food (yes, easyPizza). It's Stelios, the perpetual sequel, coming soon.