Regular readers of this blog and my Twitter feed know a few things about me. I have an arguably sick fascination with in-flight entertainment and connectivity (IFEC). I enjoy bathroom humor (and taking pictures of myself in aircraft bathrooms. I am a 'Laviator' after all...see further evidence above). And I try not to be an asshat (I try).
But something else is clear about this blog. Since I work for a magazine that focuses on hard metal, I've largely ignored a rather important part of the IFEC industry - the content side (the Emirates in-flight guru responsible for making me aware of this deficit at the AIX show in Hamburg shall remain nameless, ahem).
Some big decisions about what we see and experience in-flight is driven by content providers - we are talking about Hollywood and folks who package Hollywood after all - so I'd like to start to remedy my reticence and get down and jiggy with the business of content.
Michael Childers has kindly agreed to help me out. Michael is an independent consultant whose consultancy, LightStream Communications, focuses on content management, supply chain automation & integration, and intellectual property issues. He gave me such a great interview for a forthcoming Flight IFEC feature that I simply have to reprint it for you.
Here is my Q&A with Michael. You can also see him interviewed on video by the always-excellent The PME Interview here.
Q: The role of the Content Service Provider (CSP) seems to be evolving--with many CSPs attempting to enter post-production, and at least one post-production provider entering content services. What is the most marked difference in the role of the CSP today versus ten years ago?
A: Ten years ago, CSPs focused mostly on content licensing, but have migrated today into a taxonomy of services, many involving technical services. That is probably the biggest change in the last ten years. This might not have been the case had post-production providers moved more aggressively into content integration services, but their caution emboldened CSPs to broaden their footprint. Going back a bit beyond ten years, the migration of the CSP from simply providing a content licensing service to a role of actually buying and reselling content was a significant change from CSPs' original role. Airlines might move with caution to ensure that their desire for a single point of contact doesn't push their CSP outside its domain expertise.
Q) How have the relationships between studios, post-production facilities and Content Service Providers (CSPs) changed over the years? How would you characterize these relations now? What needs to be altered in your opinion?
A: In recent years, many CSPs began to attempt to aggregate buying power in order to leverage lower licensing fees. This was often accomplished through mergers and consolidation. The use of such leverage introduced an adversarial component into many of these relationships. Airlines frequently realized little benefit from the lower fees, with much of the difference being taken by the CSPs as profit.
The industry does not benefit when one party to the supply chain focuses more on devaluing someone else's product versus adding value to the process. But by not aggressively moving into content integration, post-production providers left the door open to CSPs to begin to encroach on services such as encoding, which has become simpler in many respects than it was when IFE first moved into digital.
Q: Is the licensing easier/harder today than in the past? Why/why not?
A: The introduction of alternate delivery methods and technologies has complicated the licensing process. This has often resulted in misunderstandings, such as a provider of home satellite services mistakenly believing that its rights included IFE when they did not, or an airline mistakenly believing that by paying for encoding they owned the digital file and could resell it. A number of such misunderstandings have occurred, and more are likely as we enter IPTV and the potential for content delivery via the providers of connectivity services. They happen when people who may lack knowledge of intellectual property business law make broad assumptions.
Q: What do you think of Content Service Provisioning and loading services that give carriers a single point of contact for all content deliverables (Spafax' latest deal with Air Canada comes to mind?) What specific companies are most forward-thinking in terms of streamlining the content provisioning process?
A: It is understandable for an airline to want to have a single point of contact. But that only works when the single point of contact has domain expertise in all of the disciplines involved. Asking a service provider who originated in licensing to cultivate technological expertise, or asking a service provider who originated in integration to understand business issues is challenging, and may result in different levels of success.
As a consultant I have been contracted by airlines to evaluate the relative strengths of CSPs across several disciplines. If you evaluate ten CSPs across ten disciplines on a scale of one to ten, it is very unlikely that you will find a single service provider with tens across the board.
Q: Some of the biggest changes are rooted in technology--changes in the MPEG-4 settings (addressed in a recent issue of AVION), the need to codify high-definition standards, and the need to address 3D. What are the challenges?]
A: Technology is changing rapidly, and airlines want to keep pace with what consumers enjoy at home. But many of the technologies being enjoyed in the home are tied to bigger and bigger screens. The Digital Content Management Working Group (DCMWG) that I have chaired for nearly ten years is attempting to determine at what screen size and at what resolution the increased definition actually discernable by a viewer. While it may be that airlines simply want to be able to use the term HD to describe their systems, it is of questionable value on many IFE screens.
Your favorite--3D--presents a lot of issues. First, the required screen size and distance from the screen almost surely limits it to premium cabins. Second, there are issues with 3D causing dizziness and nausea. Third, there are increased hardware costs, the cost of providing glasses, and the potential for higher licensing costs. On top of all that, there are doubts about how many and what kind of movies will be released in 3D.
Q: Passengers are increasingly connected at all times, including during flight. Does connectivity threaten studios' IFE revenues? What about embedded IFE system makers? Isn't connectivity key to ensuring embedded IFE's longevity versus instigating its downfall?
A: If you are asking whether IFE and C should be--or will be--an integrated product, I would agree.
But you have to consider which delivery platform is the most appropriate for the specific content being delivered. Satellite delivery of content has been dubbed "live TV." But in fact, it is the delivery path which is live, almost never the content. Live delivery of prerecorded content is, as a rule, more expensive than caching prerecorded content for re-diffusion. If passengers continue to show a preference for new movies in IFE, it won't matter which delivery platform is used for presentation. If passengers begin to demonstrate a preference for spending time inflight involved in social networking, email communications and web surfing, this may compete with traditional IFE content.
But new technologies and new forms of content rarely result in elimination of the content delivered via the prior technology--they just change it a little.