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Airline Industry Seeks New Revenue: In-Flight Broadband Service Revenue Approaches $ 1B by 2012 Print E-mail

SCOTTSDALE, Ariz., June 9, 2008- The market for in-flight broadband services is poised to grow to $ 936 million in 2012, according to recent research by MultiMedia Intelligence. Despite industry plight, airlines are continuing to invest in new entertainment services due to their potential for additional revenue generation. MultiMedia Intelligence (MMI) anticipates that given a projected 2H 2008 launch of revenue service (initially trials, with full launches ensuing), the in-flight broadband market will debut and generate $ 6.6 million worldwide in passenger revenues in 2008.

In-flight broadband is entering a new era. Since Boeing ended Connexion several years ago, in-flight broadband has seemingly been void of activity. However, during this lull, several initiatives to re-launch in-flight broadband have been underway, as industry players prepare to launch in-flight service.

There are two camps of in-flight broadband solution providers, those employing air-to-ground (ATG) technologies and those using satellite-based technologies. There is extensive debate during this initial trial period about what will be the winning technology for in-flight broadband connectivity. There is also division in the in-flight entertainment (IFE) market of whether to offer a less costly narrowband solution (such as LiveTV's Internet solutions), or whether to deliver a more costly, but more robust and future-proof broadband solution.

MultiMedia Intelligence's new research also found:
  • Today’s lighter weight systems provide airlines significant fuel savings over previous generation solutions. On a fleet wide basis, MMI estimates the annual savings for a typical airline is nearly $15 million. Additionally, air-to-ground (ATG) solutions which do not create aerodynamic drag from an exterior antenna can provide additional savings as well.
  • IFE services are targeted to be available to passengers in all cabins (first, business, and coach) on deployed airplanes. Initial marketing efforts focus on business travelers; however, providers must not discount leisure travelers. The in-flight broadband market has a strong correlation to the on-ground Wi-Fi hotspot market, a market in which leisure users will account for 50% of access sessions in 2008.
  • Roaming aggregators such as Boingo and iPass are crucial to driving usage. Providers are in talks with roaming aggregators, an initiative which, in addition to driving usage, will also improve consistency in passenger experience and support in identifying broadband-enabled flights.
  • Live in-flight broadcast video is also poised for significant growth in 2009. While this service is more established than in-flight broadband, usage revenues are still anticipated to nearly double in 2009.

The research, "Broadband in Flight: Wi-Fi and Direct Broadcast Video Become the Next Generation of In Flight Entertainment" examines the market for next generation in-flight entertainment (IFE), with a focus on in-flight broadband services. The market research report identifies the global market potential, usage, business models, and competitive analysis for the in-flight broadband market. Next generation IFE services are segmented by access technology (GSM, satellite, air-to-ground), as well as application (voice, video, and data). Forecasts include planes installed, installation revenue, and usage revenue. Key competitors are characterized, as well as the pros and cons of satellite compared to air-to-ground. The research was conducted by Senior Analyst Amy Cravens, who has many years of research and market expertise and is considered among the most authoritative sources on public broadband markets.

ReportBroadband in Flight: Wi-Fi and Direct Broadcast Video Become the Next Generation of In Flight Entertainment
# of Pages41
# of Tables11
# of Figures9
Market Forecasts

· Worldwide In-Flight Entertainment Usage Revenues

· Airplanes Deployed: Long-Haul vs. Short-Haul

· Worldwide In-flight Broadband Installation Revenues: Long-Haul vs. Short-Haul

· Worldwide In-flight Broadband Connects Long-Haul vs. Short-Haul

· Worldwide In-flight Broadband Usage Revenues Long-Haul vs. Short-Haul Airplanes Deployed

· Worldwide Installation Revenues for Direct Broadcast Video

· Worldwide Usage Revenues for In-Flight Video


Rick Sizemore

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About Multimedia Intelligence

MultiMedia Intelligence, a market research and consultancy firm, specializes on the markets and technologies for delivering and monetizing digital content and services across multiple platforms. We look beyond the classic 'three screens,' which include TVs, mobile handsets, and computers. We put markets into the broader context of the industry ecosystems that are converging and changing traditional business models.