Factors to consider when predicting the future of embedded IFE

Pressed  to describe how we see the IFE industry evolving in the face of CNN reports such as these – “Say buh-buh to seat-back screens”, we feel compelled to share our response with analysts covering the sector, and tech-savvy travelers who care about the passenger experience (#PaxEx).

We know a lot of people see this as a black and white issue, and think it’s inexplicable that in a BYOD [bring your own device] world, airlines still install in-seat IFE monitors. But the issue is not so black and white. Here are the factors coloring the choices being made by airlines now, and what they must consider in the near future.

1) At present, virtually all long-haul aircraft are ordered and delivered with embedded inflight entertainment systems, and the latest generation systems are significantly lighter than their predecessors.

2) Major Gulf carriers have indicated they will continue to offer seat-back screens into the future. Emirates tells us it fully intends to fit its 150 new 777X aircraft with seat-back IFE.

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IFE on board Air New Zealand’s new 787

3) As long as the Gulf carriers continue to offer seat-back IFE, at least *some* of their competitors will feel compelled to do the same.

4) Because of continued demand for seat-back IFE, major airframers have already started planning on incorporating fourth generation IFE in their new-design aircraft. For instance, Airbus has publicly announced plans to offer embedded IFE on the A330-800neo and A330-900neo.

5) Because *most* inflight connectivity systems don’t yet have the bandwidth to support a plane load of passengers streaming video over the Internet, connectivity is not yet replacing embedded IFE (when higher capacity *global* solutions are eventually available, this may change). Wireless IFE is, however, being used to augment the inflight connectivity experience. The roll-out of wireless IFE on Delta and United is strategic – it pulls eyeballs away from that precious live connectivity pipe, eyeballs that would otherwise try to stream video over the Internet.

6) Delta is in the midst of installing new seat-back entertainment systems on 56 Boeing 757-200, 43 Boeing 737-800s and 57 Airbus A319 aircraft through 2016. Additionally, more than 100 new Airbus and Boeing aircraft are already scheduled to be delivered with seat-back entertainment through 2018. Certainly, since Delta already offers embedded screens on many aircraft, and is bringing embedded IFE to even more aircraft, its decision to go fleet-wide with its ‘Delta Studio’ wireless IFE offering will enable management to gauge what passengers ultimately prefer. Delta will serve as an interesting test case. But unless Delta announces a major change in course, we’re going to see those seat-back screens when we fly.

7) In addition to the inflight connectivity bandwidth conundrum, another reason why long-haul carriers still adopt embedded IFE is that Hollywood disallows the streaming of early window movie content to passengers’ own devices, and certain airlines still see a lot of value in offering EW content to their passengers. So if an airline offers wireless IFE (streamed from an onboard server), it can’t *yet* offer those new titles. This EW window is, however, shrinking, and as it shrinks, wireless-only IFE solutions will become more and more attractive for the long-haul crowd.

8) Wireless IFE is opening up a world of entertainment possibilities for narrowbody operators. Airlines that would never have offered IFE on their aircraft in the first place are now adopting wireless IFE solutions. But this generally represents a new opportunity for providers (with a few exceptions). Airlines are also augmenting the embedded IFE experience with wireless IFE, as people grow accustomed to double and triple screening. So opportunities abound for generating wireless IFE business despite the presence of embedded IFE systems.

9) With all of that said, we’re watching this space very closely because major brands like Lufthansa are launching long-haul, low-cost service (Lufthansa’s supervisory board recently approved its plan to do this under the Eurowings brand.) We’ve asked Lufthansa if it will offer embedded IFE on the long-haul, low-cost service or if it will opt for a purely wireless cabin. Despite repeated requests, the carrier has not provided comment. If Lufthansa chooses not to offer embedded IFE – AND if this service proves successful – then the dominoes may start to fall as other low-cost, long-haul carriers follow suit. But of course, if this type of service proves hugely popular, and surpasses the popularity of Lufthansa and other legacy carriers’ core products – which currently feature embedded IFE – then a far greater shift will transpire in the industry (and the change in IFE from embedded to wireless will be a mere footnote). Call us when Delta, American, Lufthansa, Air-France-KLM, British Airways, Emirates, Etihad, Qatar, Cathay or SIA decide to rip out the screens on their core long-haul products.

[Photos credited to Isaac Alexander, aka @jetcitystar]

2 Comments

  1. Don’t disagree with the article at all and it captures industry sentiment well. However, what many in the industry aren’t paying enough attention to is that W-IFE is not just an IFE platform, but part of a greater mobile strategy for airlines. There has never been a one-size-fits-all solution for IFE and that fragmentation seems to be growing, not shrinking, as the complexities of IFE and Connected IFE change with technology, bandwidth, cost and revenue models and many other factors. Today’s premium travellers are most likely content with embedded IFE and that’s who currently pays the airline’s bills. The mobile generation will no doubt begin to sway the pendulum the other way moving forward however – so there’s room for both, I can’t see one approach completely dominating the industry and some airlines backing either – or both – approaches are clearly hedging their bets too.

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