Valour Explores How the Cloud will Disrupt IFE Content Delivery
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In the 2024 edition of its “The Future of In-Flight Entertainment Content” report, Valour Consultancy (Valour) predicts that a migration to the cloud in terms of content delivery will change the traditional relationships between content service providers, content companies and airlines. APEX Insights speaks to the author, Summer Staninski, about what this means for the in-flight entertainment (IFE) industry.
Licensing: The New Frontier
“The cloud is facilitating the switch away from the traditional value chain to an evolving value chain because content can be prepared and updated so much faster,” Staninski explains. “There are fewer hands for files to pass through, and so licensing needs to be quicker and more direct, as it is when airlines work directly with a streaming platform.
“Different sorts of licensing models have been put forward as possible options for the future. Airlines are wanting to replicate streaming platforms, which tend to have episodes added gradually and content updates regularly,” she continues. “To achieve parity with such platforms, we might see the IFE industry move to more of a subscription-based model – instead of lengthy negotiations for certain titles that stay on the aircraft for months at a time, there might be brackets of content that an airline subscribes to, so titles can be updated on a weekly basis and added or removed based on engagement stats.
“Vendors have also been considering pre-emptively processing content while licensing arms of studios and distributors can prepare licences and contracts and files can be onboarded very quickly as soon as a deal is struck – this extends the window for content, so as soon as it’s out in theatres or premiered on a network it can be onboarded,” Staninski says. “This can be beneficial to all parties across the supply chain, as studios can charge more for content that is quickly onboarded after its premiere; airlines can offer a wider range of more engaging content based on data-driven decisions; and CSPs can focus on their role as the curator of entire IFE offerings rather than being preoccupied with licensing.”
Increased Revenues
Staninski believes that not only will more speedy onboarding of content mean that studios can licence more of their content to airlines, driving extra revenue for them, but that carriers themselves will be able to sell more ancillaries as a byproduct.
“Content owners and airlines could use the speed at which content could be onboarded for promotions, perhaps to advertize a new show or subscription service, or even a product,” she claims. “Different content would also be intelligently linked, for example short-form interviews with actors from a new release movie might discuss a few products that they like, which could also be for purchase in the onboard shop.”
Furthermore, Staninski feels faster content cycles will mean that airlines will be incentivized to keep stored content onboard rather than investing heavily in in-flight connectivity (IFC) to host access to streaming platforms, which remains expensive to implement and requires a very high level of bandwidth.
Slow Uptake
While Staninski believes this cloud-based future is beginning to be embraced by a couple of content labs in the US, which can process content in as little as 24-48 hours, it will still take around 10 years for use of the cloud to be widely adopted throughout the content processing supply chain.
“One cloud-based lab claims that they can slash content processing costs by 10x and some have business models where studios pay nothing for the content to be processed and the airline just pays a delivery fee, so it’s extremely competitive already and not everyone is wanting to make this switch,” she says. “There have also been security concerns using the cloud as it can be susceptible to hacking and other unauthorized access. However, it’s unlikely that today’s content licensing setup will survive.
“With adoption of the cloud, it seems like IFE content licensing could sit nicely alongside IFC, and airlines could create a harmonious IFEC experience where they can still reach a captive affluent audience with cached content, but also offer Wi-Fi access,” Staninski concludes.