The second and final day of APEX Middle East & Africa 2018 focused heavily on in-flight entertainment content and ancillary revenue opportunities, with delegates discussing the challenges still faced by the aviation industry and how best to solve them.
A NEW AGE OF ARAB CINEMA HAS ARRIVED
According to Marwan Rahbani, president of Rahbani Productions, the Arabic culture demands a wide variety of choices, and this is no different whether for the food offering during Ramadan or the IFE on flights. Luckily, Rahbani went on to say, more and more films are being produced and released across the Middle East. For example, 50 films were created in Egypt during 2016 and 2017 combined, whereas 29 films have been made in 2018 so far.
One of the reasons for this, according to Rahbani, is that a higher number of graduates than ever before are specializing in media. That, coupled with the fact that businesses have realized entertainment “is a money-making machine” and they will receive 30-40% return on their investments, means it is becoming a more solid industry.
However, Rahbani explained, “the young generation are balanced between East and West,” and as such are exploring more daring topics than traditional Arabic films once did. “These new subjects will put more pressure on CSPs [content service providers] when it comes to movie choices and censorship. Not everything on the ground is allowed in the air. Something that would be accepted on one airline wouldn’t be allowed on another one.” To this end, Rahbani said it is important for CSPs to understand their clients’ needs and advise when a film will lose its identity through too much editing and would be better off avoided altogether.
AIRLINES NEED TO CHANGE THE WAY THEY LOOK AT MUSIC
Iain Kemplay, managing director of Kemplay Consulting, said that it’s difficult for airlines to measure the benefit of local (or mainstream) music due to the scant availability of passenger consumption data. He noted that, while some airline systems can capture it, the data they do get is open to interpretation.” While he pointed to new independent Arabic music labels entering the market, he claimed airline engagement with them isn’t as high as it should be, because they default to bigger brands like Rotana. Kemplay said he believes that the market for local music potentially lies with the airlines who don’t yet have in-flight entertainment and connectivity (IFEC) solutions onboard.
However, panelists Karima Damir, who works in Artist Development and Marketing for Sony Music Entertainment Middle East; and Sylvain Mahy, director of Digital and Publishing for Universal Music MENA, said that their labels are both investing in new local content and that exploring a stronger relationship between airlines and local artists represents a win-win for all parties: The artists want their music everywhere, this gains them exposure, which is good for the label, and smaller acts are much more flexible when it comes to providing exclusive content and brand association.
Rather than getting rid of music altogether, which Qantas made headlines for earlier this year, Damir and Mahy both agreed that airline music offerings need to be optimized. In particular, they noted that music is always categorized by album on board, whereas streaming services like Spotify show people prefer listening to playlists. The panelists said this represents a good opportunity for airlines to commission certain music content from labels, which they could curate according to the carrier’s needs. “We need to work beyond seeing airlines just as a distribution channel,” explained Damir.
HOW SOCIAL MEDIA IS TRANSFORMING COMMUNITY, COMMERCE & COMMUNICATION
“No matter what you do, this will always be mine and it will always be personal to me,” Facebook’s Terry Kane said of his mobile phone at the opening of his presentation. For Facebook, the future of communication is mobile, with Kane citing statistics from Facebook IQ which state that in India, 70% of people are mobile-first. And in a digitalized world, where communication is global, Kane also said people’s concept of community has broadened. According to data from Facebook IQ, one in two people say they identify first and foremost as a global citizen, “and they expect people to treat them that way,” he added.
Facebook also sees video as a central pillar of its ongoing growth strategy. “Video is key to us. We’re buying content, we’re creating content and we’re building our content ecosystems to keep people engaged with our platform consistently,” stated Kane. He underlined data which suggested video content is responsible for people discovering new brands, trying new foods and fitness regimes, and booking vacations.
With this in mind, Kane referred to commerce as “convergent,” and revealed that, with 2.48 billion people using messaging services each month, there are eight billion messages sent between individuals and businesses. This connectivity means global citizens are also global shoppers, with Facebook IQ data showing that 70% of people making purchases online take part in cross-border commerce.
GENERATING REVENUE FROM IFE: BEST PRACTICES
When it comes to ancillary revenue, PXCom CEO Cyril Jean said he often sees “false assumptions being sold by the vendor,” one of which being that streaming IFE will make an airline money. Jean clarifies that this can happen, but it requires that the airline deploy a magic formula made up of three parts: good content, thorough promotion of the product and the generation of indirect revenue. To secure the latter, Jean said airlines should consider having a “corporate section” as part of the IFE offering. “It’s an opportunity for your brand to be in front of the passengers. Highlight your corporate social responsibility, or give monthly updates on job positions. What about giving passengers the opportunity to click and register a resume? If you have cargo activities, you need to promote them.”
In terms of the remaining challenges for IFE, Richard Perrot, VP Marketing & Product Policy at Thales InFlyt Experience, identified that the IFE industry “really needs to tackle single sign-in and having much more appealing graphical user interfaces. I don’t really believe in the value of Netflix on board, but they are doing some very nice things. We’re going to bring in recommendation engines and work hard to help make the customer’s brand shine.” He also said the next generation of IFE wouldn’t just be the work of one company, which led nicely onto Jean’s statement, that “The ecosystem is led by big companies such as Thales, but what would be great is closer relationships between smaller companies and big players, because I’m sure that together we can bring highly valuable products to the airlines.”
LOTS OF WAYS TO PAY: HOW MUCH IS TOO MUCH?
For Finnair, introducing Alipay on board was an obvious thing to do, as “Chinese tourists outstrip spending in Finland than others by a large margin,” explained Jorma Nieminen, head of Ancillary Sales and Payments for Finnair. The results were successful; the average revenue from passengers using Alipay was three times that of other payment methods. While this is no doubt good for some passengers, VP and head of Digital Solutions for Visa Hadi Raad said that the ever-increasing number of ways to pay online can cause friction for buyers, a view shared by Ciaran Wilson, senior sales and accounts director for CellPoint Mobile – which recently launched AliPay for Ethiopian Airlines – agreed with.
Raad outlined the challenge, stating, “How can we take our plastic credentials to a different domain in a standardized way that works globally?” For Visa, the answer lies in payment tokens which eliminate the need to fill out forms and passwords to verify a payment card. As such, Raad explained Visa has created the “Visa Digital Commerce Platform,” which is built on the EMV Secure Remote Commerce Specification.
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