Airlines and suppliers alike see strong demand for live television content on airplanes. Passengers want to watch. But does it prove to be an expensive, expendable option as airlines face a cash crunch?
At least two major carriers suspended their on-board live television service from Panasonic Avionics in recent weeks. Most recently Emirates updated its Essential Travels flight details website with a simple note, “Live TV is not available at the moment.” But is this truly a trend?
Panasonic Avionics acknowledges the cuts, as Julie Lichty, Head of Digital Solutions and Services, explains, “As you know, the COVID-19 pandemic is having a major impact on our industry. To date, we have had two customers deactivate our live television service due to economic challenges facing the industry.”
But there is more to the move than just carriers slashing costs.
Building a case for live television in flight
In 2017 former PAC executive David Bruner suggested that 70% of the company’s connectivity install backlog would include the live television product. At the time the value proposition was easier to drive, “Scale allows us to offer more [TV] content…more economically.” It would, essentially, be so cheap for the airlines that they wouldn’t be able to say no to the deal. He also suggested passengers demonstrated an “insatiable appetite for live content.”
A significant portion of that backlog TV boost was tied to a single customer that walked away, but that didn’t erase live television demand. New customers continued to sign on for the service as they added connectivity to their fleet.
Two compelling live television content streams
Just last September BBC Global News unveiled survey results suggesting that not only is live television a compelling business case, but news is a key factor for passengers. Some highlights from that data include:
- 62% more likely to choose an airline if live TV was available; 78% for business class travelers and 89% for first class passengers
- More than half willing to pay 5% more for live TV, a third willing to pay 20% extra
- Almost half more likely to travel with an airline offering BBC World News, rising to two-thirds of first class travelers
Putting aside that many survey respondents behave different in reality, particularly around willingness to pay more for services related to air travel, there remains significant optimism among the content providers. But not for news.
While BBC Global News is focused on consumers’ demand for live news, passengers seem content to consume that in different formats and asynchronously, even during these times of seemingly unending economic and health developments on a global scale.
Live sporting events, however, remain a draw. That demand profile was by American Airlines‘ Erwan Perhirin in early 2019, describing 50% take rates for the Sport24 live television channel during the 2018 World Cup matches. When Viasat and FuboTV launched their streaming content offering earlier this year live sports sat at the center of the value proposition. And that focus has held steady for a number of years. In 2014 PAC reported that 90% of viewing hours on its service consumed the Sport24 channel. Thales Inflyt launched a new global TV platform in late 2019, with sports as the focus.
With no leagues in action the past couple months, however, the live content vanished. And so did the demand.
PAC’s Lichty echoes that sentiment, “One of the underlying facts for their decision is the lack of live sports being held around the world. Both airlines have confirmed to us that they will reevaluate live TV in a few months when more live sports content is back on air.”
Bringing it back on board?
Live television is not the only content to be suspended on planes. Some carriers also suspended the refresh cycle on their movies and other digital selections on board. Truth be told, it is unlikely anyone noticed other than the content service providers; it isn’t like there were (m)any passengers on board binge-watching content across the trickle of flights still operating.
But there is a steady confidence that this content will return. Yes, there is a cost to providing the content to passengers. But it is also one of the on-board amenities that airlines can continue to deliver without compromising on health or contact issues. And with other services on board being cut keeping passengers entertained may prove even more compelling moving forward.
Lichty is not at all deterred, “Panasonic Avionics remains bullish on the value proposition of live television.”
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