Can advertising cover the cost of a streaming inflight entertainment and internet deployment? That’s long been seen as a holy grail for the industry, and another player is now saying it can work. GDC Media believes its new AERO VISION platform can capture passenger attention through live sports, breaking news, shopping, listening, gaming, and internet browsing, while also delivering positive cash flow for U/LCC airlines.
Our ad-supported model not only offers passengers a cost-free experience but also significantly covers the expenses of in-flight connectivity services for ultra-low-cost and low-cost airlines.
– Georgina Dodson, Co-CEO Commercial, GDC Media
GDC Media, not to be confused with the engineering and modifications provider GDC Technics, will deliver the solution in either a connected or offline model, depending on the airline’s appetite for adding inflight connectivity to its fleet. Chisholm McTavish, Co-CEO Technology for the company notes that an open internet connection “undermines ancillary revenue potential.”
As a result, the GDC Media version would take a “walled garden” approach to content availability via the ad-supported model. Broader access to the internet would potentially also be offered with a premium, paid version that is ad-free.
The announcement is light on additional details of how the solution works. Co-CEO Commercial Georgina Dodson confirms that GDC Media will manage all ad sales for the implementation, though the company will also use third-party partners for that work.
Ad-supported access to entertainment is hardly a new concept. Whether it is a limited-duration session (e.g. American’s approach), a full flight session (JetBlue), or more of a partnership/sponsorship model (Delta, and a bit of JetBlue), the options exist and have for some time. Plus, the providers are getting better at provisioning them in a flexible manner, making it easier for airlines to offer multiple options to passengers.
Still, making it profitable enough to fully support the connectivity approach has generally proven elusive. GDC Media’s promise of “no additional costs for airlines” does not quite align with a program that “significantly covers the expenses of in-flight connectivity services.” Especially as the airline would still be buying the connectivity services from the underlying IFC provider. Still, the company hopes to convince airlines it has found the magic formula to deliver on this promise.
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I am skeptical of an ad-supported business model, simply because the number of eyeballs is lower than advertisers are used to in this day and age, and the audience is mostly pretty diverse in terms of interests.
A more traditional advertising model with an ad sales team going out and closing deals might work, but that’s another expense. An internal airline product that generates revenue might also work–especially for carriers that make a lot of money from credit card partnerships–but that probably excludes most low-cost carriers.
At the end of the day, IFEC is becoming basic table stakes for most airlines, but the costs are still substantial, and the premium carriers are exerting pressure to make it free, and ads are one way to defray some of the cost… I’d love to see them cover all of the cost, but I’m skeptical at the moment, because of the economics of advertising. A bit of wishful thinking on the part of cost-conscious execs, I think.
I, too, am skeptical.
I’ve spoken recently with a provider who also suggested it has developed a similar model that should work for some airlines. At least there the provider has full control over the connectivity experience and pricing to make a go of it. Having to buy the service from a third party makes it significantly more challenging.
Thanks for the editorial Seth. We get the skepticism. The inflight audience may be smaller, but it’s highly targeted. Our ad-supported model, combined with premium options, aims to balance costs effectively.
We’re leveraging third-party ad sales to keep expenses low while delivering high-engagement content. It’s ambitious, but with the right mix of ads and premium offerings, we’re confident in making ad-assisted IFEC sustainable.
Appreciate your input and the conversation around advertising onboard.