Those travelers were among the first entertained by programming such as ESPN's "SportsCenter" and A&E's "Biography" while cruising a mile high. But such experiences may soon become the norm.
Airline cabins are about to take on the feel of both a living room and an office, with access to real-time TV and the Internet. In the process, marketers may have a new flight path to pitch high-income, hard-to-reach business travelers.
No fewer than nine ventures are working to develop in-flight TV feeds. In April, JetBlue and another start-up, Legend Airlines, paved the way with 24-channel service from LiveTV, a joint venture of Sextant In-Flight Systems and Harris Corp.
Last week, Boeing Co. said it is developing Connexion by Boeing, an in-flight system it plans to launch by late 2001 that will deliver communications services including real-time TV to airplanes. News Corp. and Rockwell Collins are working to launch In Flight Network, offering a range of entertainment options, by the end of next year. AirTV and BAE Systems expect to offer a similar service in 2002.
Other players include Honeywell, and niche operations such as Live Inflight Video Entertainment and Airshow.
The race is also on to offer Internet access in-flight, allowing passengers to use e-mail and surf the Web while jetting to and from meetings.
Delta Air Lines may be the first U.S. carrier to offer the service sometime next year. The airline in April announced it had inked a deal to offer broadband Internet services at its gates and Crown Room Clubs. The agreement with SoftNet Systems is expected to lead to on-board Internet connections.
"Live TV, especially live news and sports, and the Internet are used so much on the ground, consumers and the traveling public will state their needs for it and airlines will respond," said Rich Salter, an in-flight entertainment consultant.
A NEW STANDARD
To Andre de Greef, president of LiveTV, the JetBlue flight that ended in applause shows the level of consumer hunger for real-time, on-board links. "Live TV is something new" for airlines, he said. "It's going to be the new standard."
But the question persists: When will a major carrier endure the start-up costs necessary to offer real-time TV?
"There's a lot of controversy in the industry whether live TV is something passengers want," said John Caldwell, managing director of Airline Advertising Bureau, which serves as a liaison between advertisers and the airlines. "If there's a World Series or Super Bowl or if we're going to war, people want the latest. But 99.9% of the time, we're not doing those things; and live TV is more of a state of mind."
Mr. de Greef says LiveTV has received interest from some of the major airlines, but so far only regional carrier Alaska Airlines has made a deal. The airline will join JetBlue and Legend later this year in offering the service. AirTV says it has deals with three blue-chip carriers it declined to name, but its service is still at least two years away.
One thing seems likely: In the copycat airline industry, when one major airline launches the service, the others will take off.
"There isn't one airline that believes they'll bring in an extra passenger because of television," said Sergio Coletta, commercial director at BAE Systems, part of the AirTV venture. "However, if one airline buys service and it works, the other airlines will follow no matter what. It's like keeping up with the Joneses."
On both JetBlue and Legend, LiveTV offers 24 channels provided by DirecTV, including ESPN and CNN Headline News.. Travelers view the channels on screens placed in seat back in front of them.
Programming from DirecTV airs as on the ground, ads and all. LiveTV officials say they have no plans to insert ads into the feeds.
But they do have three channels that could be used for targeted ads, including two reserved for special-event broadcasts and one sponsored by MapQuest.com.
FUTURE AD SPACE
"There is space there that we can use for advertising in the future," Mr. de Greef said.
Still, Lisa Bauer, Legend's senior VP-marketing and customer service, stresses that the airline has little intention to use the TV service as a significant revenue stream.Unlike JetBlue, which charges $5 for the service, Legend offers it gratis.
"We don't want to just put ads [on the service] for the sake of ad revenue," she said.
That's not the case for LiveTV competitors. Boeing, In Flight Network and AirTV believe they can offer marketers something more valuable than a seat on the Concorde: targeted ad programs on their on-board systems.
Like LiveTV, In Flight Network and AirTV plan to offer Internet access as well as a range of programming including updated news, sports and entertainment. Both plan to make deals for content, then sell ad space themselves. In Flight could procure content from its part-owner, News Corp.
Boeing, which is in negotiations with several airlines to offer the service but has no deal yet, has partnered with CNN and CNBC to provide specialized networks for its Connexion service. The two networks will sell ads for the service, which also includes Internet access. Time will also be available for the individual airlines to promote themselves. Other content providers could join the service later.
In Flight plans to offer a variety of ad packages, from time across the entire network (it will offer up to 24 channels as well) to specific spots on the 8:05 a.m. from Boston to Washington. Marketers could also buy all inbound traffic to a specific city, something In Flight CEO Jeff Wales says could give them a chance to hone in on travelers heading to a large event like a trade show or convention.
"Rather than buying the only billboard near the airport, you can buy the entire cabin on the inbound, " he said.
Live TV also opens up opportunities for a slew of promotional offers, he said. Hotels or rental car companies could offer excess inventory at reduced rates on the network almost on a dime. The offers could be quickly inserted into branding or other spots.
Mr. Wales said In Flight may partner with local TV stations to jointly sell advertising, figuring the local sales force will know the market better.
In Flight--which Mr. Wales said has been in negotiations with several airlines but has no deal yet--is thinking globally as well as locally. So are Boeing and AirTV.
Unlike LiveTV, whose satellite system only operates above land, the three are angling to offer TV feeds on intercontinental flights, something the blue-chip carriers prefer, according to the consultant Mr. Salter. Intercontinental business travelers often pay a premium for amenities airlines offer.
"The airlines are mostly interested in over-the-ocean" service, he said.
AirTV is spending $1 billion over the next three years to install four satellites around the globe, allowing it to provide 24-hour, global TV. It will offer up to 40 channels, but expects individual airlines to select between three and 10 to make available on-board. AirTV expects to offer preliminary service in 2002 and be fully operational a year later. The venture, which says it has letters of intent from a range of advertisers including Coca-Cola Co., is using the marketing slogan: "At home around the world."
Industry observers say both overseas and domestic passengers may be more interested in accessing e-mail and navigating the Web on-board than channel surfing. So far, only rudimentary services exist that allow people to view a few lines of e-mail at a time on a small phone screen.
Delta last month acknowledged the business traveler's need to stay constantly connected when it announced it had inked a letter of intent with SoftNet Systems to bring broadband Internet access to passengers right up until they board the plane. Before yearend, Delta will begin offering access at gate areas and Crown Room Clubs in five of its high-traffic markets.
OTHER SERVICES COMING
After the program rolls out to more airports, Delta and SoftNet may also take the service to major hotels and convention centers, according to a Delta spokesman. The spokesman also said on-board access could be functional within a year.
But other companies developing on-board Internet access may beat the Delta/SoftNet partnership to the air. Cathay Pacific Airways is working with Tenzing Communications and Primex Technologies to launch an onboard e-mail service early next year.
"The secret to in-flight is to be able to do it at high speeds with high quality at a relatively low cost," said Bruce Merrell, chief operating officer of SoftNet Zone, the venture to bring wireless Internet to business travelers.
Users will purchase a LAN card they can plug into their computers to dial up. It is unclear how people will be able to buy the cards, though it's possible they'll be able to do so both online and at the airport. Rates have not been determined.
SoftNet Systems, which is working with CMGI, Compaq Computer Corp., Cisco Systems and Nokia Corp. on the project, plans to sell advertising and sponsorships throughout the service. The home page may include ads as well as a link to Delta's Web site, where passengers can receive updated flight information. SoftNet plans on offering highly targeted ads that may be targeted not only by airport, but by terminal.
"The ads can be locally targeted as to what end of an airport you happen to be in," said Rick Schiffmann, VP-business development, SoftNet Systems.
The opportunity to advertise in-flight and in-airport excites marketers because business travelers tend to be some of the most desirable, yet hardest- to-reach, people. So-called "road warriors" often are high-income, key corporate decisionmakers who don't watch a lot of TV. But on-board, their priorities can change.
"Clearly, they are a captive audience," said Hershel Sarbin, the former president of Ziff-Davis Publishing, which ran three in-flight magazines. "And they are more captive on long and delayed flights."
Figures from the Airline Advertising Bureau show the median household income of airline travelers exceeds $93,000 annually, while none of the six broadcast networks can boast an average above $47,000.
"Passengers, especially business travelers, are a very valuable demographic for a lot of categories," said Rich Hamilton, CEO of Zenith Media. "That's why you have so many new forms of this kind of advertising that exist or are in development."