Content consumption habits and business models on the ground will ultimately shift content licensing for IFE too.
The way we consume content is rapidly changing. Gone are the days of crowding around the TV at a time a network programmed a particular movie or TV show.
Even cable subscriptions with their multi-channel offerings and programs repeated around the clock to enable ‘catch-up’ on something you may have missed now seem antiquated.
The game-changer? Internet Protocol Television (IPTV) with Subscription Video on Demand (SVOD) business models. Despite the technology and some products such as iTunes and Netflix being around for some years, in the last 12-18 months, SVOD delivered via IPTV has arrived globally, with force.
Many traditional network broadcasters now have their own apps for catch-up TV to allow you to watch programs already broadcast on demand on your own schedule. Combine this with the Over-the-Top (OTT) content players such as Hulu, Amazon and a variety of others and it’s clearly a very different landscape to how we now consume content. Even to the point where the OTT providers are commissioning their own highly successful productions, probably the best recently known example is House of Cards from Netflix.
No-one can deny the momentum of ‘binge-watching’ (many of us are guilty of a day spent watching multiple episodes of House of Cards or Game of Thrones, or a recent personal favourite of mine, Banshee) and with it the business models are changing.
I no longer need to sit through ad after ad on network television, watching a program when they schedule it, nor do I have to pay north of $70/month for a cable subscription. I can get a whole world of content by signing up to 2 or 3 SVOD services whilst cutting my monthly cost in half and having the convenience of watching content when I want. It helps that I have 100Mb/s internet download speed with unlimited data at home, that’s true – and those who may not enjoy such infrastructure may not be ready or able to take the leap into almost exclusive IPTV entertainment – but that will also change over time.
I should point out of course that the traditional networks have seen this coming and many are shareholders in some of the newer OTT providers. Smart move.
Back on the business models - take for example the announcement this week of an initial exclusive of HBO-GO for Apple-TV. Apple are a giant in their own right, but even they see the merit of such a marriage. As for HBO – a giant themselves – having immediate access to how many million Apple-TV’s in living rooms with their new IPTV/non-cable service is a great momentum builder. They both ‘get’ it.
So, what does this mean for Inflight Entertainment (IFE) and why am I writing about this on our blog?
I’ve long been saying that content licensing models for IFE need to be revisited.
Many of the models were developed back in the day when passengers shared an overhead screen and watched just one or maybe two movies on a long flight.
Content licensing for IFE since those days largely become a subset of new technologies but based around the older model for the overhead screen and in many cases a ‘per flight’ licensing arrangement. This was true for initial multi-channel PTV systems and then AVOD systems as well as portable and now streaming systems. It no longer makes sense in many ways.
In the distributors defence, content licensing has long been complicated with different revenues sitting in different areas of the studio not to mention geographic centric licensing, which is why airline licensing has sat in the ‘non-theatrical’ areas of studios forever. It’s just not as simple as saying you want to license a movie for an airline and then finish watching it in a hotel or at home later. The differences between what is classified as public performance and a private viewing are quite substantial.
No changes will be quick – or easy. But that doesn’t mean we aren’t due to at least look at it. The catalyst might just be the massive momentum and business model shift we are seeing on the ground.
I’m looking forward to watching developments closely, to being a part of the future and to helping our customers along the ride. I’ll post updates when there’s something significant to share, so watch this space.