Airlines Soar Above Windows2 Dec, 2010 By: Erik Gruenwedel
On a Delta flight from Atlanta during the Thanksgiving weekend, Angela McCleer was given the opportunity to watch Salt (Dec. 21 street date), Inception and A Dog Year (Dec. 7), among others, weeks before many of the titles are available on disc or transactional video-on-demand.
Titles cost $6 to watch, plus an additional $2 for headphones if you didn’t have your own.
At a time when release windows are under scrutiny by studios, and distribution channels such as kiosk and subscription services pay burgeoning license fees and still wait weeks and months for new releases, airlines apparently get a pass.
A perusal of major airline websites found Delta, American, US Airways and United all offering the aforementioned titles, in addition to Takers (Jan. 18), Despicable Me (Dec. 14), The Other Guys (Dec. 14) and The Twilight Saga: Eclipse (Dec. 4).
Beginning Dec. 10, US Airways will offer Dinner for Schmucks, which doesn’t street until Jan. 4.
With growing availability of Wi-Fi connectivity offered on flights, the number of passengers in the U.S. purchasing transactional VOD directly from the airlines is considered too small to upset the status quo, according to Dan Rayburn, analyst with Frost & Sullivan.
“When you are on a plane, you are not competing against anyone,” Rayburn said. “Consumers don’t have an alternative to go buy/rent the DVD. You have no choice.”
Michael Pachter, analyst with Wedbush Securities in Los Angeles, said airlines and hotels operate in a so-called “hospitality” window that allows for advanced access to select content.
“They pay upfront for that,” Pachter said.
Rayburn said studios giving airlines the green light to stream movies days and weeks ahead of street date doesn’t upset alternative distribution channels due to the location of the end user and the fact watching content on a smaller screen doesn’t equate to the HDTV at home.
Rayburn said airlines are incentivized to offer new releases due to the relative lack of related upfront costs.
“If you are doing a pay-per-download model, the studios are willing to give you the content upfront and with little acquisition cost,” he said. “The moment you sell one copy, they are getting 60% to 70% right off the top.”
Regardless, McCleer opted against paying to watch Salt, despite an affinity for Angelina Jolie and having her own headphones.
“I didn’t want to pay $6,” she said. “I could rent it at home later for less.”