It is estimated that the “Big Four” U.S. airlines (Delta, American, United, and Southwest) combined boast some 525,000 TV screens on their planes. Delta Airlines, for example, has 165,000 back-seat screens on 840 aircrafts.
These make up the bulk of the in-flight entertainment (IFE) business, especially considering that eight out of 10 passengers use the IFE system.
To get an inside perspective of this business, VideoAge‘s Water Cooler contacted Jeff Briller (pictured above), a former executive at the Los Angeles-based Anuvu, the new name of airline content licensor, Global Eagle.
VideoAge: Do airlines go directly to producers or do they use agents/distributors (middlemen)?
Jeff Briller: Most all airlines work with Content Service Providers, yet some of the larger carriers negotiate their own direct deals with studios.
VA: Airlines reportedly select content by tracking potential content to acquire on external streaming platforms. But by doing so, they show content that passengers have most likely already watched. How does this make sense?
JB: This pertains primarily to catalog or library product. Most airlines are booking 60-90 days prior to the programming month. There are generally three groups of programming monthly: A) New Releases, B) library programming curated to supplement new releases, such as sequels/prequels, etc., as well as thematic to holidays during the respective season, and then the remainder are the hits for depth of selection. The SVoD services are a great bellwether as they are using the same strategy of scheduling programming that can boost the release or addition of a title’s premiere onboard.
VA: How long (and when) is the airline’s window?
JB: What was once known as the hospitality/airline window has shifted quite a bit with the dynamic shift in major studio and SVoD service release strategies. What was once an exclusive window pre-Video on Demand has evolved and is now different for each studio. Today, they are more aligned with their respective premieres on SVoD services — following their Premium Video on Demand availability. While they are not exclusive and no longer available prior to their pay premieres, they still perform quite well as they benefit from their promotion on pay services and shorter exhibition runs in theaters. In some cases, there are significant holdbacks, up to one year, with “SVoD originals” being held back after their initial premieres.
VA: How is content priced?
JB: Library titles are flat fee for a defined exhibition window — 3/6/12 months, whether it’s a short-form episodic program that is 30 minutes or 60 minutes or a long-form feature. For new releases, they are based on length of exhibition window and flights. There is a definitely some variance in the pricing based on the size of the fleet or airline budget.
VA: Some airlines pay per viewing?
JB: It’s much less prevalent today. Generally, smaller or regional airlines may still charge for pay per view, or charge for WiFi to get access to streaming.
VA: What is the range of the license fees?
JB: Most studios bundle the content to include new releases, catalog titles, and television episodes. The studios then allocate accordingly. The methodology is unknown if a smaller specialized title or SVoD premiere would get the same license fee as Minecraft or Thunderbolts. For clarity, a studio may offer an airline pricing of $950,000 for 10 titles, 25 library titles, and 20 hours of TV.
VA: What is usually the shortest and the longest period a program is kept on the airlines’ screens?
JB: This varies for new releases and library content. As there is an incurred cost for encoding files and deploying to aircraft, there is greater value to keeping a title onboard for a longer period of time. Specifically, new releases are licensed for 4-6 months. The cost is less for four months and the cost savings greatly exceeds the percentage/quantity of views in the final two months of a six-month window. Anecdotally, there are definitely airlines that have offered certain evergreen titles for extended periods of time — as they have continued, month to month, to find an audience.
VA: American Airlines reportedly carries 1,500 titles, including 500 movies, and 200 titles are added each month. But all those titles aren’t shown on the screens’ interface. What do they do? Rotate some of them?
JB: In some instances, an airline may not offer the entire portfolio of programming due to constraints with their onboard servers, meaning older aircraft may not have capacity to support all of the titles. A title may be licensed for six months or a year, and then removed for some brief period of time and then made available again via the UI or User Interface [the data-sharing device with the ground]. In this instance, the content is most likely still on the onboard SMU [Server Management Unit], but not accessible via the UI. There is no extension to the exhibition window in this instance, or cost savings.
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