Over the past few months, top executives at major international airlines have started voicing strong opinions about embedded inflight entertainment systems. Remarks made by Emirates president Tim Clark and US Airways CEO Doug Parker are particularly notable, as they exemplify how the airline industry is divided on what the future holds for in-seat IFE in a world where tablet and smart phone use is exploding, and where wireless IFE and onboard connectivity is quickly gaining traction.
Stressing the competitive advantages that embedded platforms have afforded Emirates, Clark recently told the APEX editor’s blog that carriers that don’t invest in IFE “are fools”. Furthermore, he said Emirates will spend the money and do “whatever it takes to take us that much further on” than its competitors. And indeed, the Middle Eastern carrier recently unveiled the world’s widest audio/video on demand (AVOD) screens for economy class passengers – a full 12.1 inches of high-definition real estate.
Expressing a diametrically opposing viewpoint that sees embedded IFE as an albatross, US Airways’ Parker says people prefer to watch their own movie content on their own iPad or personal electronic device (PED), which is “better than what the airlines provide”. As such, he believes, “It is just a complete waste of your fare to give you a movie you don’t want to watch and charge you for it.” US Airways is known for having unceremoniously ripped out overhead video monitors on its domestic fleet. Its long-haul fleet comprises a mixture of aircraft operating with and without AVOD systems.
Clark and Parker’s views give us a fairly good sense of how the IFE market will shift out in the coming years – i.e. there is no one-size-fits-all solution, even in the long-haul market. What is evident, however, is that airlines are asking questions about what IFE business models work for them rather than basing these decisions on what their competitors are doing or what they think their passengers want.
“A lot of airlines got into embedded IFE for hygienic reasons – in other words, it wasn’t really their strategy in the first place. They just got backed into it because their competitors were doing it,” says Panasonic Avionics CEO Paul Margis. “While the last several years has seen a big upswing in IFE – with virtually every long-haul carrier putting it in – it’s possible that the market will stabilize to the point where there will be airlines that really focus on their embedded product offerings, while others that adopted IFE for hygienic reasons will drive that cost bar and that performance bar down, and will ask themselves: ‘What do I need to compete and what is good enough?’”
The fact that airlines are seriously examining various IFE business models – including embedded, wireless, and hybrids of the two (and more than one model can exist across a carrier’s sub-fleets) – is in turn driving huge innovation on both the hardware and software side of the industry. Imagination is, quite simply, taking flight.
TWO SCREENS ARE BETTER THAN ONE
In the AVOD space, new “dual screen” platforms (running Linux or Android operating systems) are making their debut. Touch screen monitors with touch screen remote controls can now be found on certain aircraft types operated, for instance, by Panasonic customer Virgin Atlantic (in premium economy and ‘Upper Class’) and Lumexis customer Transaero (for business class). “We’ve had the Android controller out since last November,” says Lumexis CEO Doug Cline.
Readying to offer dual-screen configurations across all classes is Qatar Airways, which will shortly launch Thales’ TopSeries touch screen IFE and Android-based “TouchPMU” (passenger media unit) on its Boeing 787 twinjets. This new handset “will be fantastic for our economy passengers,” says Qatar Airways vice president product development Xia Cai, noting that passengers will be able to play games on the controller while watching movies on the big screen. “Also, we have power sockets – two for every three seats – as well as USB and iPod connectivity. USB will be great, especially if you’re travelling on holiday. Simply plug in your device, load it up and view your content on the big screen.” Qatar will also offer inflight connectivity – Wi-Fi and GSM for data – via OnAir.
Alan Pellegrini, CEO Of Thales’ Inflight Entertainment and Communications business, says dual screens “is definitely a trend, one that is consistent with what’s going on in the consumer world. Even when we watch a movie on TV, we have something going on with our smart phones and we’re seeing that same paradigm move to the aircraft.”
Pellegrini says the TouchPMU will give Thales and its airline customers “an opportunity to start to experiment and see how to get maximum utility out of that second screen”. While the unit will start out as an IFE handset and self-contained game device, he says, it will be able to “control games on the screen (think an accelerometer steering wheel) and quickly evolve to be able to show the moving map while passengers watch a movie on the main screen. Ultimately, there is a third screen which is your own device, which is probably the [long-haul travel] environment that passengers will be shooting for – the main screen, the handheld with significant capabilities, and then their own smart phones interacting with the IFE.”
Inflight gaming leader DTI Software – which works with Panasonic, Thales, Lumexis and others – has already started to adapt some of its games for dual screen technology, though it says it is waiting for hardware providers to more fully develop the technology so that it can adapt it to their platforms.
“We definitely want to leverage that [dual-screen] ability and it’s possible that we will do it before or just as the technology rolls out to the consumer market so that’s very interesting. (Apple TV wants to do it, for instance. And we’ve seen the Wii remote has the same concept.) This enhances the experience of the game play. For carriers interested in differentiating the inflight experience for premium passengers, second-screen iterations are particularly interesting,” says DTI vice president of operations André Chalifoux. “Once an airline decides to take this route, it provides us specifics and it might take three to six months before we release the product into the field.”
WHAT ANDROID MEANS FOR IFE
Because Thales and Panasonic have chosen Android as the operating system for their next generation IFE monitors, DTI recently inked a deal with global interactive entertainment software company Electronic Arts to ensure it has “excellent Android content” when the systems are installed on board aircraft around 2013.
Chalifoux says all 120 of the company’s titles (in-house and licensed) will be technically operable over Android at the end of the summer. “Our objective is to have our complete in-house catalogue available over Android, and compliment it with really strong licenses, like Disney and Mumbo Jumbo,” he says. “We have some airline platforms right now that are using [Android] 2.1, so essentially there are differences from one vendor to another, but we support from 2.1 and up for all different platforms whether embedded IFE or tablets.” This applies to both portable and in-seat IFE solutions.
If an airline wants an Android app outside of the DTI catalogue – and the app makes sense and there is a specific need to meet – “then we’ll do the testing, and enter revenue share with the third party but it’s always something we analyze. We have to run tests and make sure it doesn’t crash, and get the license agreement with the provider in order to offer it to the airline,” adds Chalifoux.
Gaming overall is on the rise as a form of entertainment, but for the past five years people have gravitated towards what is referred to as “casual gaming”, and, as such, they “expect a certain type of navigation and usability on a plane”, says DTI vice president of creative and product development Vincent Bédard.
“They can be disappointed [by current IFE systems] because they are used to iPad-like consoles. But I’d like to think that the Android market and the Apps store have brought to us more advantages than disadvantages because they’ve recreated this wonderful pool of new casual gamers. And more and more of the hardware providers are going to find ways of talking to these devices and using them in coordination with them.”
The DTI executive suggests that when people are flying, “they are willing to play, get into adventures, and watch TV shows that they don’t generally watch on the ground. They may say, ‘I would never have rented this movie; I don’t have the time’ but they have the time on IFE. When you have people in suspended disbelief above the clouds, they are ready to try something new. They are really open, and that’s the best state of mind one can establish with a human being, and it’s the same for games. We strongly believe that people experience games they wouldn’t experience if they were not flying. It’s the beauty of our business.”
Accessing games via a wireless connection on board is also in the offing for passengers. “HTML 5, the code that will be able to run in multiple browsers, will allow us to release games on wireless solutions,” says DTI’s Chalifoux. “There is quite a bit of interest from airlines to have that kind of content as well. Discussions have begun with solution providers and we’ll be testing until the third quarter 2012, which is when we’re targeting to have availability for HTML 5 content.”
He adds: “What I’ve been seeing is all these guys will have slightly different (wireless IFE) hardware but they all try to target at least minimum bandwidth per device. Right now we recommend games that load a little faster (for wireless), but eventually we will pursue development of more complex games like 3D, but we’re not there yet.”
It’s understandable that some airlines would like to offload the burdens associated with offering embedded systems; they are under intense pressure to reduce costs in an operating environment coloured by sky-high fuel prices, and in-seat IFE – with all the weight, wiring, and recurrent content licensing fees that go along with it – is an easy target.
In some cases, airlines will deem the streaming of content from an onboard service to passengers’ own PEDs to be sufficient. However, this scenario takes ‘early window’ movie content out of the picture because Hollywood studios do not yet permit the streaming of early window to passenger-owned devices due to security concerns. Brazilian carrier Gol, for example, last year developed its own in-house wireless IFE solution with local cached content (sports, music, newspaper and magazine articles, television programming, and games), and began rolling it out on its Boeing 737 NextGen fleet.
By adopting hybrid wireless IFE solutions that include an airline-provided portable device or seat-back screen (with appropriate security encryption technology in place) airlines can continue offering early window movies to passengers, whilst streaming later-run movies and other content to passengers’ PEDs. Virgin America is taking this approach for the next iteration of its “Red” IFE system. Citing the complexity, expense and maintenance requirements of current embedded systems, the San Francisco-based carrier announced in September 2011 at the APEX EXPO in Seattle that it would replace the current Panasonic system on its Airbus A320s with a new hybrid platform, called BoardConnect, from Lufthansa Systems.
For a while it appeared that Lufthansa Systems would also secure a key deal to fit long-time Panasonic customer Qantas’ fleet of domestic Boeing 767s with BoardConnect but, despite what the carrier calls a “successful” trial of BoardConnect on a single Qantas 767, Panasonic’s eXW wireless solution was chosen for the sub-fleet. Branded as QStreaming by Qantas, the solution will provide over 200 hours of on-demand IFE content to iPads at every seat.
Crucially, however, the agreement represents new IFE business, as Qantas does not offer an embedded IFE solution on its domestic 767s.
The long-haul market, meanwhile, still largely favours embedded IFE. Buying a new long-range aircraft without IFE is “like buying a car without a radio”, says Panasonic’s Margis. This helps to explain the allure for IFE manufacturers in having their system branded by airframers as “linefit offerable”, which means it will be installed at the factory before an the aircraft is delivered to the airline.
That’s not to say that there isn’t business to be had in the retrofit market. On the contrary, certain embedded solutions are still attracting customers. Lufthansa, for instance, recently announced plans to replace legacy Rockwell Collins IFE platforms with The IMS Company’s low-cost RAVE seat-centric IFE solution, and contracted the firm for at least 80 shipsets for installation on Airbus A330-300s, A340-300s, A340-600s and Boeing 747-400s.
This order brought the RAVE backlog up to 165 aircraft across ten customers, and “should put us on par to be the number three IFE supplier based on the fast acceptance of RAVE in the market,” says The IMS Company CEO Joseph Renton.
One of the things that make RAVE so attractive is that is offers “the familiar ease of a tablet”, notes Lufthansa. Passengers can navigate the system “simply by stroking or wiping a touch screen (economy class) or by using a remote control with so-called one-finger navigation in first and business class. Image resolution is higher than that of the existing solutions and the system reacts much faster to user input. All of the programme content is stored in each display unit, it can even be used without connection to the server,” adds the carrier.
Still the cost differential between retrofitting with a wireless solution versus a wired one is substantial. Just how substantial is it? Lumexis’ Cline recently shed some like on the subject when he revealed that the company’s new wireless IFE solution, dubbed WiPAX, is “about one fifth of the price” of its fibre optics-based embedded platform. In addition to regional and sub-fleets, wireless will change the game for narrowbodies, “whether in Asia, Latin America or Europe”, says Cline.
Noted inflight entertainment and connectivity expert Wale Adepoju remains somewhat sceptical about the capabilities of wireless IFE, however. “It’s almost like we’ve talked ourselves into the position where the supplier says, ‘You asked for it’, and the airline says, ‘You said it was a good idea’. A couple of airline CEOs played around with their iPads and thought, ‘I could buy one of these for X amount of dollars, and get content from the sever, and why can’t you do that on an airplane?’ And people [in the IFE industry] not being brave enough to say, ‘I can do it if there are 20 of you, but if there are hundreds of you [quality will suffer].”
WHAT TOMORROW MAY BRING
Nonetheless, a large portion of IFE hardware stakeholders in the portable and seat-back arena – BlueBox, Lufthansa Systems, Lumexis, Panasonic, Rockwell Collins and Thales – as well as inflight connectivity providers Gogo and Row 44 have added wireless IFE solutions to their portfolios. Most are now saying they will be able to adequately support about 50 passengers per wireless access point (WAP), with an average three WAPs installed on narrowbodies and five installed on widebodies.
Breaking out his crystal ball, Thales’ Pellegrini says: “I fully expect large airlines to have a combination of state-of-the-art embedded, customized IFE all the way down to maybe just a wireless distribution network on some aircraft that will stream video on passengers’ own devices, and even a combination thereof. Some airlines see both. They want convenience and the comfort of a seat solution, but also if they’re comfortable with their own device, to stream from a server. The challenge for a company like Thales is to look across these innovations and have products available in each of these spaces so that we can be a full service provider of IFE and connectivity for airlines.”