That’s Entertainment: Monetizing Content and Connectivity
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Content and Entertainment | Education Day, APEX EXPO 2015 Breakout Sessions
For the Content and Entertainment track, it was all about forging meaningful partnerships between airlines and affiliates in a connected landscape.
Tal Kalderon, IFE manager at El Al, one of Israel’s largest airlines, warmed up the crowd with a nod to the language barriers that inevitably arise during international conferences: “I found English easier than teaching you Hebrew, but please forgive me,” he joked with the crowd. What wasn’t lost in translation was his universally applicable advice: when it comes to building deep reservoirs of content, airlines have a lot to gain from thinking outside the box.
For Kalderon, this means partnering with local media outlets and unconventional content providers (think audiobooks, academic institutions, religious communities and personal development speakers) and trading exposure for content – no financial transaction required.
Indeed, Kalderon found the “opportunity to expose content was even greater than cash” for the content providers he worked with. He was also surprised to discover that the affiliation with a major domestic airline provided extra incentive for providers to forge a partnership. Everyone loves a good “halo effect.” Magazines, on-screen content promotions, merchandise and PR all can be leveraged as “content exposure” vehicles for partnering providers, says Kalderon.
This theme of finding new ways of building content partnerships extended to the brave new world of in-flight advertising. Robin Cole, VP marketing and business development at Global Eagle Entertainment (GEE) provided the last of the three presentations, but judging by the number of questions from the packed room at the end of the session, her topic was a hot one.
With previous positions at Sony, Apple and Microsoft, Cole has plenty of expertise monetizing innovation-driven markets and has applied this thinking to the connected aircraft. Her central point: advertising, “when done correctly and not too overtly” has the potential to become a huge (to the tune of a projected $945 million USD) revenue generator for connected airlines.
Since there’s already an established digital advertising ecosystem on the ground, “nothing about this is new except that it’s been done 30,000 feet in the air and at 650 miles an hour.”
Still, it’s not all blue skies, she acknowledged (as did the hand raisers at the end). Privacy concerns, data-sharing among content providers, and metrics (CPMs don’t work as well when there’s no direct path to purchase) remain barriers, as does the fear that ads will simply be tacky and intrusive.
The solution to that last concern is to provide an “integrated experience,” says Cole. “The idea is not to feel advertised or marketed to, but to make it feel like they’re [the passengers] being taken care of.” So instead of pre-roll before a video, it might mean exchanging an email address for the opportunity to win free tickets to a show. Time will tell whether this is a winning strategy.
Regardless, if there is one challenge that airlines face when it comes to content and entertainment, it’s audio licensing.
Barrett Goodman of Sony and Iain Kemplay of Kemplay Consulting shared how airlines and CSPs have moved from “collective disinterest” towards “collective concern” over audio licensing issues.
It’s a thorny issue, and has become particularly burdensome in the last twelve months. As Kemplay put it, as IFE offerings have changed over time and fleets have added huge increases in audio services, “Major labels started to take an interest, and in broad terms ‘not everything was right’ and not all licensing was being covered off.” As a result, airlines and CSPs have been beset with litigation woes.
To address the problems, Kemplay suggested a move away from a patchwork of agreements and towards the implementation of stop-gap measures while CSPs work with major labels to come up with licensing solutions. For his part, Goodman emphasized Sony’s push for clarity, simplicity and flexibility. “It’s good that record labels are looking at global all-rights packages. It’s a great solution, which didn’t exist previously,” says Kemplay. As airlines and CSPs continue working through these growing pains, the general (and optimistic) consensus is that major labels want to get back on airlines; the question that remains is how.
All photos by Vance Walstra.