What can we expect to see in the future of in-flight entertainment and connectivity (IFEC)? Edward Shapiro, Chairman of Global Eagle Entertainment, Row44 and Lumexis, has big ideas on this topic and as the keynote speaker at this year’s APEX Expo conference he has a lot of eager ears with which to share his views. Shapiro sees consolidation – especially in the United States – as a different sort of industry cycle. And he believes that the economic success of airlines “is different this time” and that they are now behaving “like real companies.” A lot of that comes from the way their actions vis a vis the IFEC space.
In 2007 airlines treated IFEC in one of three ways: A necessary evil, a differentiator or a cost headache easily ignored. Fast forward to the current era and almost every airline has converged to a single view of what IFEC systems are; it is a view Shapiro sums up well, “We are now in the early stages of enabling high margin ancillary revenue.” IFEC is good for keeping passengers distracted (APEX says 24% of time on planes is spent watching movies, for example) but it also presents a massive revenue opportunity for airlines and IFEC providers.
Part of that comes from more and more passengers seeing IFEC systems on board. LCCs are in on the IFEC game in a big way compared to a decade ago and the “densification” of aircraft – adding more seats on the same planes – reduces the unit costs of providing the IFEC services to them. As Shapiro explains, “The more passengers who can consume content and connect, the more opportunity for [the IFEC] business.” And that opportunity comes almost entirely in the way of advertising and marketing opportunity.
For the IFEC providers the opportunity to target advertiser content to a very specific market demographic – mostly affluent with money to spend) – is a huge market. And it is not just about partnering with other travel companies. Rather, Shapiro sees the market in selling passengers products and services that will be purchased not during the few hours on board but after the flight lands. It is yet another screen in an ever growing diversification of the advertising world. And it is a screen which has great potential for delivering huge returns, mostly because the advertising opportunities have not yet been fully realized.
And, for consumers, the news is quite clear: Get ready for more ads coming to the IFE screens. Right up until it becomes another screen which is tuned out or turned off rather than one which the passenger actively engages with. But right now it doesn’t appear anyone in the industry sees that revolt happening soon.
Never miss another post: Sign up for email alerts and get only the content you want direct to your inbox.