Transport TV

October 2008

A hundred thousand channels in the sky.

That number is not far-fetched—indeed, it’s almost inevitable and is probably a low-ball estimate. Consider that the Dubai-based airline Emirates this summer launched its new fleet of A380 planes with more than 1,000 channels of entertainment on offer for all passengers. There are 140 to 150 airlines in the world buying entertainment. All of the big ones already operate audio/video-on-demand (AVOD) systems, and some carriers, like Singapore Airlines or Emirates, already offer in excess of 100 movies per flight. They are ahead of the curve, but as the rest catch up, the arithmetic is obvious: 140 or 150 airlines times 1,000 or more equals 140,000 or 150,000 channels. And, even if most of those channels will be audio, where is all the video content going to come from? The answer is the Hollywood studios, television distributors and other providers already selling to the in-flight market. And in-flight may be just the tip of an emerging market for entertainment provided on transportation, from ships to taxicabs. This end of the nontheatrical market is a different sort of niche, with its own technical demands, and there are additional players who are probably unfamiliar to people in the mainstream. But at the end of the day, it’s all television, following consumers wherever they go, sometimes by their choice, sometimes whether they like it or not.

CAPTIVE VIEWERS

“We supply over 140 airlines per annum; sometimes one title, sometimes dozens per month, depending on the airline,” says Julia Lewis, BBC Worldwide’s sales and marketing manager for in-flight entertainment, who refers to transportation-related TV as the “captive-audience” business. “In addition, BBC Worldwide supplies BBC News to over 20 airlines on a daily basis. BBC World was part of the First Great Western on-board train trial in a Volo train carriage, which was extremely successful [in 2005]. Hundreds of titles are used in cruise ships around the world—and again, BBC World can be supplied to certain ships in certain waters. BBC’s longest-lasting client [has supplied] the British merchant fleet for over 40 years.”

BBC Worldwide invests in program rights to obtain trapped audience copyright to enable it to offer all of its titles worldwide. For contractual reasons, some titles will not be available. The company’s best-selling titles this year include comedies such as Gavin & Stacey, After You’ve Gone and Fawlty Towers, the drama Ashes to Ashes, the cooking show The Hairy Bikers, the motoring program Top Gear and nature documentaries.

“BBC Worldwide values its captive-audience business highly,” says Lewis. “Television bosses worldwide land and book BBC titles for their network which they have just seen on a plane—sometimes they even commission the format for their own country. Passengers worldwide feel at home and new viewers enjoy television which is not in their own country or they have been too busy at home to watch but wanted to.”

The growth in demand in the sector has been driven by technology. “New technologies, including compact, portable media players, are bringing Hollywood movies and TV content to new venues,” says Janice Daniello, the senior VP of sales and marketing at the California-based Post Modern Group, the leading specialist company in technical aspects of the in-flight business. “Airlines have used personal media players for many years in order to give their passengers a choice of movies and other programming. In the ’90s these were modified Sony Walkman (Watchman) players using 8mm video tape. Then some airlines replaced the tape players with portable DVD players. But DVD is a mass-market medium and as such wasn’t a good match with airline requirements, which include the ability to offer specially edited versions and multiple languages.”

Newer technologies in use aboard airlines range from highly sophisticated, server-driven VOD systems installed in the seat back to portable media players that are essentially a hard-drive version of yesterday’s DVD or tape players, Daniello explains. The latest VOD systems installed aboard airlines like Singapore or Emirates allow passengers to select from a vast library of feature films and TV shows, as well as games and literally thousands of audio channels. Some even allow passengers to plug in their own media (iPod or similar) or to access the Internet. Portable players typically contain about ten feature films and may also offer other types of content, such as games or news.

SKY-HIGH FEATURES

Movies on planes were first offered decades ago, but a big turning point in the market came in 1991, when Virgin Atlantic started offering seat-back video in all classes. The first interactive VOD system was installed by Swissair in 1997, and VOD is now offered by dozens of carriers.

Live television made its first appearance on Delta during the Atlanta Olympics in 1996. Qatar Airways started showing eight live channels (from the Tailwind 560 satellite system) in 2006. Singapore introduced live television channels via broadband to passengers’ own laptops in 2005, delivering BBC World, Euronews, Eurosport and CNBC. Japan Airlines, Lufthansa and El Al quickly followed suit.

“The arrival of new airplanes with more capacity for films has had a big impact,” says Mike Covell, the chairman and CEO of the California-based Entertainment In Motion (EIM), an independent in-flight distributor. “The number of films they want has increased three or four times. So there has been a big increase in demand. But the fact is that airlines tend to have a certain budget for in-flight entertainment, so as the number of films goes up the price per film tends to come down. But the increase in volume is good for us. The other big difference in the market from a few years ago is the increase in the perceived importance of entertainment for the traveler. It used to be that in-flight entertainment ranked tenth or 12th among the factors in choosing a particular flight. Now it’s third or fourth.”

EIM acquires programming from independent producers and sells to the airlines, either directly or, more often, through service companies such as Spafax (headquartered in London) or Stellar Inflight (based in Sydney). These firms buy programming on behalf of the airlines and package it for VOD or a linear channel, integrating things like the safety announcement. They also need to get the content into the right format, which is where companies like EIM come in.

“Our competition is the major studios, all of which have departments selling to in-flight,” says Covell, who formerly worked for MGM. He adds: “The unique thing about the in-flight market is that it’s very open in terms of competition. Nobody has exclusivity. No seller has any airlines tied up and no airlines have exclusive films.”

“We typically sell to the airline market ourselves, while the other nontheatrical uses, such as buses or trains, or hotels or prisons, would go to a licensee,” explains Neal Rothman, the VP of nontheatrical sales and distribution at Twentieth Century Fox’s Fox In Flight division, which has delivered to airlines comedies like The Simpsons, Family Guy and How I Met Your Mother, dramas such as 24, Prison Break and Shark, and vintage series like M*A*S*H and Mary Tyler Moore.

“The marketplace is changing with the advent of more personal in-seat-entertainment systems, whereby airlines need to fill more channels with content,” notes Cassie M. Yde, the president of The Television Syndication Company, which recently closed in-flight deals on The Color of Change and other factual programs. “It is a very competitive marketplace and license-fee prices have dropped a bit. Airlines mostly look for half-hour programs from smaller independent producers like myself. These could be documentaries, non-verbal content or lifestyle programs. They get their movies from the major studios and in some cases do deals with branded cable channels like Discovery, Animal Planet or National Geographic for content.”

IMG Media is the worldwide in-flight distributor for the world’s top football property, the English Premier League, as well as for Wimbledon. It also handles ship sales of both of those, and it has a deal with the Heathrow Express train service for Olympic clips (from the Olympic Television Archive Bureau).

Demand for sports content has taken off with other genres. Emirates is offering about 300 hours of sports now. It used to be a rolling tape of a few hours; now it’s VOD. “With the bigger airlines we tend to have an agreement for a certain number of hours over the course of a year,” says Katie Ford, a sales executive at IMG Media in London. “With smaller ones, it might be an ad-hoc deal. We’re talking about finished programming, not live. But for ships, we deliver live Premier League or Wimbledon, for example. Those deals are directly with the shipping lines.”

The airlines’ programming is the result of a combination of the client choosing some programs and following the advice of IMG on others. “We would tell them, for example, that the Ryder Cup is coming up in September, so you want to be showing Ryder Cup programming,” Ford says. IMG Media puts together a newsletter of which events are available. The tricky part is that the airlines need to book up to three months in advance. This is because of their own technical requirements. “Two to three months is normally how long the process takes. We deliver tapes at this point. We are going increasingly to digital, but it does not really make a difference in reducing the time it takes. A lot of planes carry daily highlights, which is an exception. We can do very quick turnarounds, but 90 percent of the programming is booked two or three months out.”

MAKING THE TRANSITION

Covell of EIM says, “If it’s just video, the process is easy. But the encoding for electronic systems seems to take forever.”

Major airlines normally have different types of planes in their fleets with different on-board entertainment systems. This means having to adapt programming not only for each airline but for each type of plane, which is one of the biggest complexities of the business.

“We provide the media required to support each sale made by the studio or distributor; essentially we are their fulfillment arm,” Post Modern’s Daniello says. “The kinds of services we provide to support this market include creating foreign-language tracks or subtitles, creating specially edited versions and creating the myriad of different types of media required to support all the systems in use. Although new technologies are in widespread use, many airlines still use tape-based systems for either overhead-projection-systems or in-seat systems. Recently, there has been a proliferation of different types of hardware on the market and all have different media specifications. It’s the task of our staff to keep abreast with all the new technologies so that we can support their requirements.”

The choice of programming that’s put into the systems comes down to the servicing companies. Kate Groth, the Los Angeles-based entertainment-content manager at Stellar Inflight, says, “We buy from the major studios and television companies. We follow different models. It’s like programming television channels. You look at demographics, sensitivities, the type of passengers the airline is carrying. Some programming always works, such as travel programming about the destination the passengers are going to or most things from BBC. So, for example, Air Pacific, based in Fiji, always carries [vacationers], so you want upbeat, holiday-spirited programming. Royal Brunei is an example of an airline with religious sensitivities. Programming showing alcohol consumption or sexual activity would not be acceptable.”

SHOPPING AROUND

Finding suitable content obviously requires an international perspective. “Sometimes we have to shop around,” Groth says. “We work for an airline in Kazakhstan, which needs Russian programming, so we need to be on the lookout. The good thing is that just about anything you see on TV is available for in-flight, so if you see it, you can probably get it. Sports programming and things with a lot of music-rights clearances would be exceptions.”

Groth adds, “Airline entertainment budgets are getting somewhat bigger as they move to more sophisticated systems.”

Sometimes a sponsor can step in to make the acquisitions budget stretch further. “Sponsorship is a bit more lucrative than licensing, so we like to follow that route if possible,” says IMG’s Ford. “However, in-flight is bit of a mystery for a lot of companies. In-flight is obviously an attractive proposition. You have a high-end demographic with many business flyers and it’s a closed environment with nothing competing for their attention. There’s no Internet at this point. An obstacle is that there is very little feedback in terms of the audience. There are no ratings. The only way you can find anything out is with questionnaires. Companies tend to see in-flight as an extra on top of their other media campaigns.”

Outside of the airline market, the growth of demand in the nontheatrical sector is not just about new technology. It’s about mentality.

“The growth is especially in markets where there is an evolving understanding of copy?right laws,” says Rothman of Fox. “Nowadays you have people acquiring licenses in cases where they might not have in the past. There is a growing awareness that they need to do this. When you buy a DVD, it’s for your own viewing at home, not for exhibition. It’s always a process of education.”

Post Modern Group reports that the proliferation of entertainment options is not limited to commercial airlines. Many business-jet operators also offer sophisticated entertainment to their high-flying passengers. The company is also starting to see customers using more entertainment in other forms of transportation. IMS Inflight signed a contract last year to provide media players to Hertz for use in rental cars. In Australia, DP Pax Entertainment provides content for use aboard trains.

PLANES, TRAINS , AUTOMOBILES

Utah-based digEcor provides por-table media players, called digEplayers, that passengers can rent for their trip. They turn it in at the other end. The digEplayer is already programmed with movies and television shows, as well as games.

The London-based Around The World says its transportation activity has included audio books for trains in Australia, and it has also sold programming for VIP jet charters. “I think handheld devices on cruise ships could develop as an interesting opportunity for entertainment suppliers,” says the company’s managing director, Mike McCutcheon.

“We do sell to other outlets other than airplanes,” notes sales executive for in-flight for Europe, the Middle East and Africa at the U.K.’s ITV Global Entertainment. “Cruise liners and hotels are probably our main clients after airplanes.” Current best-sellers include dramas such as My Boy Jack; the U.S. version of Hell’s Kitchen; entertainment programs like Parkinson and Corteo (the latest Cirque du Soleil show); and occasionally some wildlife or children’s shows. She adds, “Trains and buses are beginning to acquire content. I haven’t closed a deal for these rights yet, but I am currently speaking to a couple of potential clients.”

Rothman of Fox says, “I would expect to see the proliferation of new uses. The digital format has so many more possibilities. Instead of having to change tapes, you have a server. Seat-back video on buses becomes plausible.”

In London, some taxis are now fitted with Cabvision, which uses a computer housed in the trunk of the vehicle. As the passenger enters the cab, the system powers up automatically; it is linked into the fare-meter system. The passenger can choose from a range of channels. The BBC already supplies content to this service. As similar offerings roll out worldwide, distributors will certainly be clamoring to tap into yet another route to audiences.