Looking at airline WiFi and passenger experience, it’s great to see technology from Gogo and other providers continue to improve and see airlines introduce variants along the lines of a model we introduced in late 2009 after thinking how a convergence of a handful of dynamic industries might occur: mobile technology, IFE, airline WiFi, and respective digital video/movie, book, game and music markets.
The key elements were:
1) Use mobile technology and digital entertainment to drive ancillary revenue and disrupt the traditional cost-center IFE value chain
2) Position passenger markets as a customer acquisition channel for strong consumer digital entertainment brands fighting a battle for “living room share” rather than try to sell content directly
3) Deliver a more compelling online experience focusing on site experiences travelers engage in everyday life rather than a “walled garden” of tired brands like Skymall and HSN dominating portals such as “Skytown Center”
4) “Think outside the flight” – own the itinerary to drive mobile engagement, capitalize more on explosive growth in digital media, and deliver relevant merchandising throughout the traveler’s “60-hour cycle”, not just on the plane
Since then, I’ve enjoyed seeing many airlines and connectivity partners download or view the model and talked with some directly, and it’s great to see these elements gradually unfold in various ways, albeit in fits and starts, with even better things to come.
For #1, this is clear now, but before we’d heard of the iPad and the mainstreaming of Netflix, Amazon Video, etc, it was a bit tougher to envision.
Now we’re seeing various models, either directly via new technology from traditional seat-back vendors, via Gogo (or comparable connectivity vendors), or via iPad rentals. It does remain to be seen whether airlines and Gogo can execute on promised technology improvements (Gogo’s announced GTO service), and if the model of selling content directly will drive WiFi adoption or result in significant ancillary revenue, but passengers clearly are enjoying greater options.
However, #2 could still offer more upside, of which a great example has now emerged in Southwest’s new service with the Dish Network, which provides free live TV in exchange for the passenger’s viewing of a short video for Dish Network and likely earns Southwest referral revenue greater than trying to sell movies.
Customer acquisition is critical in the battle among providers like Amazon, Netflix, Apple, Microsoft, Comcast, and movie studios themselves (via their Ultraviolet services), and as I suggested originally, the opportunity to feed customers to these firms fighting for “living room share” is tremendous.
For #3, as we encouraged in “Part II: Can Airlines Power Ancillary Revenue with Digital Media and Wifi?“, the site experiences of Gogo and others are better, emphasizing brands consumers engage with on an everyday basis. Remember, Aircell’s (Gogo) and Row44’s original core competencies were telecommunications technology, and the consumer experience competency will continue to grow.
For #4, Virgin Australia’s new approach of “thinking outside the flight” to market its mobile flight app through the “60 hour cycle” using its knowledge of the customer’s itinerary is a great way not only to engage passengers, but also capture WiFi and digital entertainment revenue before passengers download it from own digital media services, a potential missed opportunity I’ve written about before…
And as the annual APEX conference unfolds, during which Virgin America and Gogo plan to introduce their new service together, it will be interesting to see how airlines and their partners continue to develop new and creative variations on this model to deliver a better passenger experience and drive more ancillary revenue.