News that Netflix is looking at having a presence on board aircraft has been warmly received by Global Eagle Entertainment, which believes it is well placed to assist popular, terrestrial-based streaming media services in making the leap to wireless inflight entertainment.
Early this year Netflix chief product officer Neil Hunt told the Irish Independent that the firm had entered into discussions with undisclosed parties to explore adding servers to planes, trains and hotels. “Realistically it would be a much better consumer proposition for us to put a content server on the plane and then let you click and watch what you want. I mean, you could log into your account and then you could pick and choose. The control could be run across the plane’s wireless system,” he said.
The airline industry’s leading content service provider (CSP) Global Eagle declined to say whether it has entered talks with Netflix, but CEO Dave Davis tells RGN, “I think this idea of a terrestrial-based streaming service offering their product in the air is something very interesting to us and we think that has lot of potential and could attract a lot of interest from airlines and customers, so it is something we have been taking a serious look at.”
Though many passengers would like to stream their Netflix and HBO GO accounts via inflight connectivity, with rare exception (see right) this kind of service cannot be widely supported due to capacity constraints. And in any case, using up bandwidth via the connectivity to stream video “is an inefficient use of bandwidth and an expensive way to do it”, suggests Davis, “so the idea would be to get as much of the content stored locally as possible and then have limited streaming, or some sort of overnight updating of some kind to the content.
“But at least from our perspective, the answer is to get as much on board the aircraft as possible and not use up valuable bandwidth.”
A number of wireless IFE offerings already have a “Netflix-like” feel to them. Delta Studio immediately springs to mind (though the airline has cautioned us not to even liken Delta Studio to Netflix out of an immense amount of precaution regarding copyright). United Airlines is less cautious, recently telling RGN that its streaming video solution is akin to Netflix. “Rather than perpetuating the overhead [IFE] model, we are creating a Netflix-style product, fully stocked,” said a United spokesperson.
Davis agrees that various wireless IFE offerings are “moving in that direction” in terms of the look and feel, but he adds, “The value of a Netflix or something like that is the brand, so customers of Netflix or HBO GO on the ground [would] be able to use it in the air as well. The trick with some of these streaming libraries is they’re so huge that the question is, ‘can you get enough storage on board an aircraft regularly enough to maintain integrity of the product?’ And that’s not fully fledged out yet but it’s a question that will be answered. The other side of the coin is that airlines are doing this [wireless IFE] on their own, including with us. Having that branded partnership – using accounts on the ground or in the air – would be a big deal.”
Though servers on board aircraft today don’t have the storage capacity for a library the size of what Netflix offers in full, “those systems are upgradable” with new installations, and “we believe at this point, it is doable to have enough storage space on board at a reasonable cost to store some very, very large libraries”, says Davis. “The cost of storage is dropping very rapidly so we don’t think it’s a technical or a cost hurdle going forward.”
Global Eagle believes a Netflix-branded type of offering would attract international carriers – and perhaps one could offer “smaller libraries” where there is less storage. “There may be opportunities to do it there before domestically, or at least in parallel,” says Davis.
One niggling question has yet to be answered. Are Netflix’s digital rights sufficient to put a Netflix library on board? Because essentially, if you put a file server on board the aircraft, and passengers connect to that file server, it’s a public performance venue firstly and secondly a private network.
Acknowledging that he is not privy to the details of Netflix’s contract with content creators including the major movie studios, IFE industry veteran and established expert Michael Childers says, “I wonder if Netflix has considered that doing so [bringing a Netflix server on board] would likely put them in a position of needing to acquire nontheatrical public performance rights? This sounds very much like DirecTV’s play in 1999. LiveTV had developed a content service that enabled them receive content via satellite on the aircraft and redirect it to the seat. DirecTV agreed to provide the content in the air that they were providing to subscribers in their homes. But as I pointed out at that time, DirecTV’s rights to serve consumers in homes and limited out-of-home venues did not include nontheatrical public performance rights for inflight entertainment. LiveTV subsequently found that obtaining such public performance rights represented an enormous administrative burden and limited the amount—and kind—of content they could offer. For the most part, premium channels like HBO and Showtime were out, and basic cable channels were often in.”
Global Eagle’s Dave Davis declined to speculate on what Netflix’s current digital rights may or may not cover, though he acknowledges that generally when it comes to performance rights, “It’s a bit of a gray area in my mind in terms of different performance rights or different pieces of content that some of these big streaming services hold; that’s an area we would need to dig into.”
However, the Global Eagle CEO was willing to opine about whether Netflix has designs on becoming a formal IFE player. “I don’t see these big streaming services interested in building hardware and going to airlines and trying to get libraries on their own. I think this is relatively small for what these guys want to do, and I think if anything it would be through partnership [such as what] we’re talking about.”