Now, more than ever, airline passengers have great expectations for inflight connectivity, including an expectation that they will be able to access their favorite over-the-top (OTT) media services to stream content in an unrestricted fashion when on board.
But just as content creators can determine what movies and television series can be accessed on the ground — as well as where and when they can be accessed and over what platform, as is their legal privilege under copyright law — they also have the power to dictate when and if content can be accessed in flight.
Anyone who has tried to access BBC content from an IP address outside the UK is probably aware of the geo-restrictions and licensing restrictions imposed. And many parents around the globe probably know that the availability of Disney+ content varies by country due to different licensing agreements and regulatory frameworks.
Even so, there is a common “misconception” amongst consumers that, “If I can stream it at home, I can stream it in the air. My subscription covers me everywhere. Wi-Fi equals access,” Dr. Joe Leader, CEO of the Airline Passenger Experience Association (APEX) said this week at the APEX Global EXPO in Long Beach, California.
The truth, however, is that “no major streaming service explicitly permits inflight access under standard terms and conditions. Inflight licensing is handled separately, via airline and content owner agreements, not through general streaming terms.”
And so, as airlines and their aero ISPs bring truly broadband inflight connectivity pipes to aircraft and consider advertising an unfettered inflight streaming experience to passengers, they should take heed: content rights are presently balanced within a terrestrial framework, and there is some legal uncertainty around whether those rights extend to the inflight realm — most especially when traveling abroad and overseas.
This uncertainly creates “risk across the entire value chain,” Dr. Leader warned at the show.
That’s why APEX, as the trade association for the industry, is proactively addressing this grey area to provide much needed clarity to industry. It is presently exploring a concept called APEX STREAM, which stands for Standardized Technical Rights Enforcement for Airline Media in a bid to “help the industry embrace the future but also make certain that rights are deeply honored every step of the way,” Dr. Leader explained.
APEX STREAM will seek to answer some key questions, including, “when airlines promote streaming, who bears the risk?” The association intends to work with the studios, airlines, content service providers (CSPs) and inflight connectivity providers, and has retained antitrust counsel to make certain that the steps it is taking are in alignment with antitrust law. Indeed, the APEX STREAM concept is currently being reviewed by counsel.
Until there is clarity, however, Dr. Leader recommends that airlines not actively promote streaming on the chance it edges them closer to liability. Precedent has been set here. Record labels restructured how music was licensed to airlines after licensing abuses.
During a powerhouse session at APEX Global EXPO, executives from Disney, BBC Studios, Paramount Pictures and Sony joined Dr. Leader in a discussion about how to protect content and value while also meeting expanding passenger expectations.
It is a rare occasion indeed to have several Hollywood heavy-hitters and the British public-service broadcaster on a stage together talking openly about content rights — even at events hosted by APEX, whose predecessor, the World Airline Entertainment Association (WAEA) was formed in the 1970s by major Hollywood studios and airlines as inflight entertainment gained major lift.
Dr. Leader stressed from the onset that there would be “no pricing or market coordination, no contract terms or suggestions for contract terms.” Rather, he said: “Each party on stage and in the audience has an independent position, making it our job as a trade association to facilitate understanding and exploration, not collective action.”
Whilst broadband inflight connectivity is poised to create new inflight entertainment opportunities, the lion’s share of IFE services in the world fleet are supported through a licensing model, whereby the airline licenses content from the studio, often by working with a trusted CSP, and broadcasts the content on either in-seat screens or to passengers’ own devices via a portal.
Aviation market factors into macro strategies
One key theme that emerged from the discussion led by Dr. Leader is that the aviation market and the revenues provided by it are very important to studios. Indeed, aviation factors into their macro strategies including whether to green-light projects!
“We’re in 160 different countries. We spend $24 billion a year,” Disney VP of platform and distribution sales Christopher Hill said in terms of the studio’s work across markets.
“[Aviation] is an important industry for us to secure; obviously, there’s revenue, but there’s a lot of value, I think, for both sides of the equation, from the Net Promoter Scores on the airline side to us kind of being able to show our content in some advanced windows. It’s something we think about a lot, and we obviously know that the ubiquitous streaming, as soon as that starts to scale, it’s going to be more disruptive.”
Disney has thought about different bridge strategies, including around cached content for IFE, he said, but the streaming disruption could prove so great that it “could impact kind of how we think about our movies going forward.”
Traditionally, studios have controlled how users access and use digital content via DRM (digital rights management). “DRM has been a great tool. We’re obviously open to suggestions moving forward,” said the Disney executive.
The studio doesn’t want to have to use “blunt force here, where we’re just trying to block IP addresses, or we’re just stopping it when it’s in the air. [That’s] not a great customer experience, and we know that, like there is sometimes an expectation.”
At the same time, there are lots of downstream implications because monetization “goes back to the actors and goes back to directors. So, it’s something that also, if we’re not policing, it’s going to create problems in the industry.”
Education is key
Though it might be tempting to assume one can bypass traditional licensing in favor of promoting streaming OTT on board aircraft, it is “not so,” said Sony vice president, sales and marketing Richard Ashton, so it’s important to “educate” the airlines.
Paramount Pictures vice president non-theatrical sales Vince Cruz agreed, saying it’s simply “incorrect” for airlines to assume they can circumvent licensing in favor of streaming, and that airlines should make customers aware.
Zina Neophytou, who serves as BBC Studios SVP Out of Home & BBC News commercial development, did not mince words when she declared:
We value our rights, and it’s something that we will continue to do.
Our IP, our rights are extremely valuable, so licensing cannot be bypassed.
So, I think that there’s that massive education that needs to be done here.
Another key consideration is that studios always want to showcase their content in the best possible format and ensure the best possible experience for passengers. Airlines which choose to offer streaming without edge-caching those streams to preserve bandwidth and content integrity, may in turn unwittingly showcase the content in a less than favorable light, which would be hurtful to the content and its owners, and indeed everyone downstream, including, as Hill stressed, directors and actors.
At the end of the session, Dr. Leader assured that APEX, in collaboration with studios, airlines, CSPs and IFC providers will work together to ensure that “the future is brighter for everyone, most importantly for our customers.”
They will share more details about APEX STREAM and next steps at the APEX TECH conference in January in Los Angeles.
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