New owner for Row 44, AIA wants to create “entertainment in motion powerhouse”, convince Hollywood to relent on EW

SANTIAGO, CHILE: Greetings from Santiago, Chile, where APEX this week hosted its first-ever conference in South America, an educational committee meeting that, by all accounts, has proven to be a great success.

News from the event has been flowing so fast and furiously that I’ve all but given up on trying to publish every story, and, in desperation, have taken to Twitter to unleash 140-character tweets for your digestion (you’re welcome to follow me at @APEXmary).

As you know, some of the best news stories break on the sidelines of conferences, be it over a cup of coffee or a glass of wine (or two). In fact, during a coffee break today, I had the opportunity to speak one-on-one with Airbus aircraft interiors marketing manager Patrick Candelier about why he believes it’s important to “dispel the myth” that wireless IFE will ultimately kill the business case for wired systems.

He suggests that wireless IFE “is not IFE; it is something else. It’s another type of service. It’s an onboard wireless platform. But it’s not IFE.”

Say what? Here is Candelier in his own words:

“The first reason that wireless IFE is not IFE is that the interface for the passenger is not the monitor; it’s his own personal electronic device (PED) so it means that the quality of service is dependent on the type of PED that the passenger has if he or she has one.

“Not all passengers have their own PED. This so-called ‘wireless IFE’ is the type of solution that will come as a complement to the wired IFE system in the long-haul market. This is what we [at Airbus] see. Of course, there are always customers that do some unique things, but the bigger trend on the long-haul market is that ‘wireless IFE’ is a complement for sure.

“Now, for the single-aisle, short-haul market, onboard wireless platforms may deliver a different type of service, especially for those aircraft that are not equipped with IFE, and this can be accomplished via line-fit or retrofit. The battlefield is in the short-haul market. This is the place where ‘wireless IFE’ systems will actually be proven in the future.

“Another illustration of the fact that ‘wireless IFE’ is not an IFE system is you can’t deliver the service to more than let’s say 150 passengers at one time (regardless of the WAPs or the aircraft type). This is according to the suppliers.”

In light of the above, one wonders if it’s time to rename wireless IFE. How does Wi-Ped grab you?

Underscoring this new paradigm, perhaps, is today’s announcement from special purpose acquisition company Global Eagle that it will acquire inflight connectivity and IPTV provider Row 44 and about 86% of the issued and outstanding shares of Frankfurt-listed content service provider Advanced Inflight Alliance (AIA), in a move they say will “create the largest entertainment and connectivity platform for the worldwide airline industry”. Read the financial details of the deal in Global Eagle’s press release.

During a conference call about the mammoth deal, I asked Global Eagle founders, MGM ex-chairman and CEO Harry Sloan and former Sony Pictures co-president Jeff Sagansky, if they will tackle the short-haul market first.

The answer, it seems, is yes, as I was told: “There really isn’t any meaningful entertainment on the narrowbodies; that will be the key place we’ll attack and for narrowbodies, you need no in-seat entertainment so that argues for Wi-Fi … However, for long-haul aircraft, you’ve got the in-seat entertainment but still there is a lot more entertainment to bring to them so I think really both markets are open for us.”

Sloan boasts: “Both Jeff [Sagansky] and I have years of experience aggregating and initiating content, and believe the net frontier of growth will be providing quality entertainment to the airlines in projected multi-billions [of dollars] in the air.”

He notes that Southwest Airlines, which is fitting its entire fleet of Boeing 737s with Row 44’s Ku-band satellite-supported connectivity system, recently inked an eight-year follow-on agreement with Row 44. Among Row 44’s other customers Norwegian offers the firm’s inflight Internet service free-of-charge to passengers.

AIA, says Global Eagle, “is a leader in movies, games and apps” and is uniquely positioned to provide diverse wireless content delivery to passengers’ own devices.

The companies will create an “entertainment in motion powerhouse”; and will “go in and pitch airlines together” for connectivity and content and “that is where the real power comes”.

Crucially – and Hollywood studios should listen up on this one – Global Eagle, now called Global Eagle Entertainment, wants to be able to convince content providers to allow them to stream earlier window content to passengers’ own devices.

Claiming that they’ve “never seen this area professionally handled” before, Global Eagle Entertainment plans to “go to the studios, saying [there is] a much bigger pie now” and that it can deliver “a higher volume of revenue to you” should studios relent and permit early window streaming to PEDs. The issue “might get more attention if more revenue is generated”.