The fledgling low-fare carrier dropped plans to charge passengers $5 for the service, saying the move could spur sales of sponsorships and advertising around its individual monitor LiveTV system.
Airline executives feel the overall benefits gained from offering a free service will be worth more than the revenue generated from user fees. Potential revenue was estimated at $810 a flight.
The airline -- which started flying in February and inaugurated the TV service in May -- had planned to charge for LiveTV once it was satisfied the system worked flawlessly. Last week, it reversed course.
"We decided it was way too powerful an option to do something this innovative and this generous . . . and charge for it," said JetBlue VP-Marketing Amy Curtis McIntyre.
But Stephen Klein, analyst at S&P Equity Group, said passengers may have balked at the charge. "People don't want to pay for anything extra; they think everything should be included," he said. "It's like, `Here's a snack; give us a dollar for it.' They find it petty."
The free service allows the airline to charge potential advertisers a higher rate, Ms. McIntyre said. JetBlue executives said they expected about half the passengers would pay the $5 fee; but without a charge, more people are expected to use it.
JetBlue said it hasn't cut a sponsorship deal yet. However, executives said they expect an undisclosed sports TV channel to gain rights to put its logo on the TV headsets sometime in late August. Other opportunities include advertising on LiveTV channels unused during a particular time, which viewers would encounter as they channel surf.
The airline also has the facility to run ads on the personal TVs as the system loads up, much like some Internet service providers run ads before Web access is available. But Ms. McIntyre said that option has largely been ruled out in an attempt to avoid consumer exasperation with ad oversaturation.
"The last thing we want to do is turn this into a petri dish of advertising," she said.
Instead, the airline feels the TV service can be a separate pillar in its branding efforts, which include new creative.
BREAKING THIS WEEK
JetBlue's latest ads break this week in New York and San Francisco newspapers and promote the inauguration of its New York-Oakland route. Print from Arnold Communications, Boston, display a forthright, yet humorous tone reminiscent of ads for fellow low-fare carrier Southwest Airlines.
Ads play off the airline's eschewing hot meals in order to keep fares down. One features a caricature of a chicken with the statement, "Nature never intended it to fly." They go on to say, "Really low fares. Free live TV. No rubber chickens."
Arnold won the JetBlue account from Merkley Newman Harty, New York, earlier this summer as JetBlue sought to emphasize retail ads touting its low prices. The agency is expected to launch a cohesive brand-building initiative this fall that could include spot TV for the first time.
Even though its new effort has a irreverant tone that screams Southwest, JetBlue takes pains to position itself as the low-fare carrier with a sense of style that executives compared with the Volkswagen Beetle and Target Stores.
Partly funded by a venture capital group linked to financier George Soros, JetBlue offers new planes, leather seats and substantial legroom in addition to LiveTV.
"[Southwest] did Texas and down-home and straightforward really well, and we respect the hell out of them for that," Ms. McIntyre said. "We want to own New York style."