Although airlines worldwide have been hit hard by the rising cost of fuel, many continue to invest large amounts of money into providing new and improved in-flight entertainment (IFE) and communication services, in their ongoing efforts to give them the edge over their competitors.
The recent availability of Direct Broadcast Satellite (DBS) services for aircraft, for instance, will continue to change the way content for IFE is managed, in addition to significantly expanding the variety of entertainment and services available to passengers.
The addition of DBS and Air To Ground (ATG) technology to flights can already be seen in the introduction of satellite based in-flight telephones and WIFI connections.
Traditionally IFE content has been stored at a central point on-board the aircraft in question, and then distributed to points around the plane; whether from a video/CD/DVD player, some kind of storage device or from a central server.
Until the introduction of on-demand services, which now allow passengers to personally select the content they wish to view or listen to, pre-recorded programming would be played throughout the flight within single streams; the advent of new technology allowing multiple on-demand streams and thus changing the management of IFE content considerably and reducing the need for cyclic ‘radio style' audio channels that were once so prevalent.
With the expansion of satellite capabilities and ATG technology on aircraft, however, content will no longer need to be stored on-board the aircraft, rather broadcast from a central location for the entire fleet whilst providing passengers with easy access to the internet.
The significance of such a change is great; for airlines, passengers, IFE suppliers and rights owners alike. Whether airlines obtain content through third-party IFE suppliers, or choose to license content directly with copyright owners (or their representatives), will obviously vary depending on the company in question.
What is constant, in either scenario, is the increasing desire for more content then ever before and with that, the added responsibility of managing the interests of many rights owners.
The options open to producers looking to sell in-flight rights to their programmes, in terms of territory, are generally whether to allow the airline to broadcast their programmes on all flights belonging to the airline (world-wide rights on all flights) or to limit the rights being sold to certain routes only.
In many instances, especially when programmes are sold only in a local language format, airlines themselves will only ask for the right to broadcast the programmes on certain routes. Of course, if a programme is available in multiple languages, its appeal to airlines is greater since it would be accessible to more people traveling.
It is in this respect that granting rights for the ‘territory' can be confused, as unlike traditional broadcast agreements which refer to territory as the footprint within which the transmission is licensed, in-flight rights relate only to the aircraft or fleet in question.
As to who and where license agreements should be obtained from instead relies on where the licensee is based rather than where their fleet operates.
An obvious next question for producers, when selling in-flight rights, is what programming should be sold?
In the case of a producer with only a single programme or a limited number of programmes to sell this is not such a difficult question to address, although a lot of IFE available today includes programming from entire television networks or a large bouquet of programming provided by large producers with a variety of content on offer.
In such cases the producer will normally sell a ‘cycle' of programmes to the airline. A ‘cycle' is usually defined as a specific number of hours of programmes provided by the producer to the airline.
Cycles also may include a certain number of premium hours of programming (the more popular programmes being provided by the producer) and a certain number of hours of regular programming.
Depending on the number of hours in the cycle being bought and the mix between premium programming and regular programming, the fee being paid by the airline will vary.
As to what effect the introduction of DBS and ATG technologies will have on current licence agreements and whether additional rights will need to be granted to airlines to cover these changes in their broadcast models, will obviously depend on existing arrangements and how IFE is managed.
What is certain though are the increased number of options available to airlines as far as IFE models are concerned as well as the potential for untapped revenue streams for content producers.
With respect to music content for instance, although the way in which royalties are calculated, and rights are treated, will vary depending on with whom (and where) they are licensed.
Changing the content delivery model (e.g. from a central server to an ATG system) may then significantly change the type of licence and extent of royalties required.
Particularly in consideration of royalties being paid for the dubbing/reproduction of music, as these new technologies will ultimately require less reproductions to be made than previously (i.e. need removed for content to be stored on each aircraft).
The playing of music, regardless of format, has long required royalties to be paid both by those disseminating (the airline) and those supplying the recordings; the former for public performance (communication), the latter reproduction for the purpose on-supply (dubbing/copying).
These two basic rights most commonly requiring licence agreements from two groups of rights holders; one being the record producers/performers and the other, music publishers/songwriters.
Add music videos, then additional agreements may be required directly from the record labels. The need to revisit in-flight broadcast agreements already in place, for all types of content, would therefore seem inevitable.
Although the high cost involved in obtaining the large amount of bandwidth required for in-flight broadband services might prove prohibitive for most; it will be interesting to know whether any airlines plan to adopt broadband internet as their sole source of in-flight entertainment in the future. This would certainly have a huge effect on the IFE industry as it now exists, for copyright owners and content providers especially.
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