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Recruiting and Retaining Crew in a New Digital Age

Maritime communications have evolved at a phenomenal rate ever since broadband connectivity made a successful impact in the way people communicate with everyone at work.

Since SatCom service providers offer new connectivity packages that allow for higher digital data exchange capacities, new broadband solutions for crew onboard are also emerging with different allocations of data and bandwidth needs.

Just as our previous article – Is Enhanced Connectivity Worth The Investment – sea-to-shore communications are changing the lives of those people who spend much of their lives at sea.

But rather than discussing how enhanced connectivity improves the lives of everyone on board, there is a situation of conflicting values in regards to service adoption and onboard crew communications.

As VSAT installations are predicted to double over the next five years, Futurenautics Research reported that 42% of crew surveyed have not seen any improvement in the provision of onboard communications.

Neglecting crew satisfaction

This situation suggests that ship operators are only adopting new technologies to reduce costs, enhance operational efficiencies, and increase competitive advantage.

This pattern has also shown that focusing on infrastructure innovations while keeping up with new hybrid satellite solutions for operational efficiencies, fails to overlap the excruciating skepticism that exists in regards to crew satisfaction.

Balancing Expectations

As the maritime industry is becoming more customer-centric with end-users – in most cases, passengers and merchants – expecting at shore, in port, and offshore connectivity, the same solutions should be applied to attract and retain crew in an industry where there is a huge shortage of qualified personnel to bring onboard.

Adhering to the lack of corporate commitment to crew satisfaction, the popularity of land-based connectivity has also re-defined crew expectations with a twofold nature:

From a young generation that aspires to access uninterrupted offshore connectivity to keep in touch with friends and family in remote locations, to the reluctance of senior seafarers and other experienced crew to continue their nautical careers in search of more stabilised and less isolated, land-based working opportunities.

Ever since the Internet became part of our lives, connectivity has also changed the way seafarers rank their life priorities.

As a matter of fact, another survey on crew communications, by Stark Moore McMillan, reported that 70% of Filipino seafarers are prepared and willing to assign a considerable amount of their income to pay for some online services.

Similarly, 68% of those surveyed had access to communications at sea, whereas only 46% had access to free services.

At the same time, Wi-Fi access ranked as the most desired service onboard based on the ability that seafarers had on connecting their devices for personal use.

Those findings suggest that crew communications still represent the vast majority of a ship’s consumption while big data-driven features and continuous deployment of sophisticated satellite antennas are prioritised for performance and cost-saving strategies.

Sustainable solutions

So, from a practical point, how can maritime employers (end-users) benefit from the opportunities given by SatCom service providers to elaborate effective recruitment and retention strategies in the new digital age?

In fact, solutions are more concerned with strategic planning rather than engineering mechanisms.

To close the gap between crew dissatisfaction and effective labour turnover management, sustainable human resources practices are mandatory.

Affordable communications

In the shipping sector, for example, the constant growth of the global fleet is not correlated to the decreasing number of seafarers available in the market. It is a simple case of supply and demand.

The provision of cheaper or even free access to email, social media, voice/video communications, and/or Internet café facilities is a key factor for crew to stay in touch with their friends and family, while reducing isolation and increasing motivation at work.

Telaccount Overseas, a Cyprian SatCom provider, has targeted its communications campaign to crew communications.

Not only has the company embraced the increasing pressure from ship operators to manage broadband connectivity for operational and safety needs, but it has also brought Telaccount iCafe services to help crew stay connected with everyone at home.

Using high data allowance plans, users are free to connect and browse online with a pin-code request to control usage rates and other features.

Training courses and career tools

A lack of modern equipment and training courses are also one of the most resonating issues that discourage crew from seeking career progression, causing lower retention rates and disloyalty.

Land-based and remote competence training options, including virtual simulation software and accredited career-oriented courses, should be facilitated for crew to learn new skills and grow in their careers.

Courses such as Lloyd’s Maritime Academy, Videotel, and Shipgaz are great online-accessed career tools that help crew keep in sync with the ever-changing maritime industry.

Commenting on results, Heidi Heseltine, Manager Director of Halcyon Recruitment, gave a final point on employee conditions for the shipping sector in 2015:

“Shipping industry employers need to focus on strategies to retain their best people. Whether this involves creating hierarchical structures, offering clear career progression or providing training, employers need to think outside of the box and offer more than just a salary. Shipping may still be an employer driven market, but more thought needs to be given to the stagnant conditions most employees feel they are in.”

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[fusion_builder_container hundred_percent="no" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" parallax_speed="0.3" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" overlay_color="" video_preview_image="" border_size="" border_color="" border_style="solid" padding_top="" padding_bottom="" padding_left="" padding_right=""][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" border_position="all" spacing="yes" background_image="" background_repeat="no-repeat" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="small-visibility,medium-visibility,large-visibility" center_content="no" last="no" min_height="" hover_type="none" link=""][fusion_imageframe image_id="4916|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="center" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]http://217.199.187.200/valourconsultancy.com/wp-content/uploads/2018/02/nordwood-themes-359015-1024x683-1.jpg[/fusion_imageframe][fusion_separator style_type="default" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text] Maritime communications have evolved at a phenomenal rate ever since broadband connectivity made a successful impact in the way people communicate with everyone at work. Since SatCom service providers offer new connectivity packages that allow for higher digital data exchange capacities, new broadband solutions for crew onboard are also emerging with different allocations of data and bandwidth needs. Just as our previous article – Is Enhanced Connectivity Worth The Investment - sea-to-shore communications are changing the lives of those people who spend much of their lives at sea. But rather than discussing how enhanced connectivity improves the lives of everyone on board, there is a situation of conflicting values in regards to service adoption and onboard crew communications. As VSAT installations are predicted to double over the next five years, Futurenautics Research reported that 42% of crew surveyed have not seen any improvement in the provision of onboard communications.

Neglecting crew satisfaction

This situation suggests that ship operators are only adopting new technologies to reduce costs, enhance operational efficiencies, and increase competitive advantage. This pattern has also shown that focusing on infrastructure innovations while keeping up with new hybrid satellite solutions for operational efficiencies, fails to overlap the excruciating skepticism that exists in regards to crew satisfaction.

Balancing Expectations

As the maritime industry is becoming more customer-centric with end-users – in most cases, passengers and merchants – expecting at shore, in port, and offshore connectivity, the same solutions should be applied to attract and retain crew in an industry where there is a huge shortage of qualified personnel to bring onboard. Adhering to the lack of corporate commitment to crew satisfaction, the popularity of land-based connectivity has also re-defined crew expectations with a twofold nature: From a young generation that aspires to access uninterrupted offshore connectivity to keep in touch with friends and family in remote locations, to the reluctance of senior seafarers and other experienced crew to continue their nautical careers in search of more stabilised and less isolated, land-based working opportunities. Ever since the Internet became part of our lives, connectivity has also changed the way seafarers rank their life priorities. As a matter of fact, another survey on crew communications, by Stark Moore McMillan, reported that 70% of Filipino seafarers are prepared and willing to assign a considerable amount of their income to pay for some online services. Similarly, 68% of those surveyed had access to communications at sea, whereas only 46% had access to free services. At the same time, Wi-Fi access ranked as the most desired service onboard based on the ability that seafarers had on connecting their devices for personal use. Those findings suggest that crew communications still represent the vast majority of a ship’s consumption while big data-driven features and continuous deployment of sophisticated satellite antennas are prioritised for performance and cost-saving strategies.

Sustainable solutions

So, from a practical point, how can maritime employers (end-users) benefit from the opportunities given by SatCom service providers to elaborate effective recruitment and retention strategies in the new digital age? In fact, solutions are more concerned with strategic planning rather than engineering mechanisms. To close the gap between crew dissatisfaction and effective labour turnover management, sustainable human resources practices are mandatory.

Affordable communications

In the shipping sector, for example, the constant growth of the global fleet is not correlated to the decreasing number of seafarers available in the market. It is a simple case of supply and demand. The provision of cheaper or even free access to email, social media, voice/video communications, and/or Internet café facilities is a key factor for crew to stay in touch with their friends and family, while reducing isolation and increasing motivation at work. Telaccount Overseas, a Cyprian SatCom provider, has targeted its communications campaign to crew communications. Not only has the company embraced the increasing pressure from ship operators to manage broadband connectivity for operational and safety needs, but it has also brought Telaccount iCafe services to help crew stay connected with everyone at home. Using high data allowance plans, users are free to connect and browse online with a pin-code request to control usage rates and other features.

Training courses and career tools

A lack of modern equipment and training courses are also one of the most resonating issues that discourage crew from seeking career progression, causing lower retention rates and disloyalty. Land-based and remote competence training options, including virtual simulation software and accredited career-oriented courses, should be facilitated for crew to learn new skills and grow in their careers. Courses such as Lloyd’s Maritime Academy, Videotel, and Shipgaz are great online-accessed career tools that help crew keep in sync with the ever-changing maritime industry. Commenting on results, Heidi Heseltine, Manager Director of Halcyon Recruitment, gave a final point on employee conditions for the shipping sector in 2015: “Shipping industry employers need to focus on strategies to retain their best people. Whether this involves creating hierarchical structures, offering clear career progression or providing training, employers need to think outside of the box and offer more than just a salary. Shipping may still be an employer driven market, but more thought needs to be given to the stagnant conditions most employees feel they are in.” [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

How Airlines are Catering to Millennials

Millennials (also known as Generation Y) are a demographic cohort referred to by some as the “Me, Me, Me Generation” – lazy, constantly seeking feedback and prone to jumping from job to job. Others see a group of liberal and upbeat people brimming with confidence and self-expression, who are most receptive to new ideas and ways of living. Whichever side of the fence you sit on, one undeniable trait of millennials is their enormous purchasing power.

For this reason, millennials are one of the most talked about and disruptive generations for businesses globally. Companies, some of which have been household names for generations, have had to fundamentally shift their company culture, redesign products and services, and adopt new, fluid sales channels to resonate with this increasingly important group. Airlines are no exception.

Take Joon, Air France’s new low-cost subsidiary, as an example. The airline launched last year and promises to offer “a global travel experience” as opposed to just a flight and a fare. Part of this experience, somewhat bizarrely, involves a troupe of flight attendants decked out in resplendent white trainers, blazers with rolled up sleeves, polo shirts and ankle-length trousers. However, the “experience” element of the new brand goes a little deeper than a chic uniform. All-too-aware that millennials have grown up with an unmatched presence of technology in their lives, Joon has crafted its in-flight entertainment and connectivity (IFEC) offering accordingly.

First, all seats are equipped with USB ports to allow in-flight charging of personal electronic devices (PEDs). While this is by no means unique, it does point to an understanding that in-flight Internet and wireless content streaming – both of which are being offered by Joon – go hand-in-hand with in-seat power. After all, who boards a plane with a smartphone or tablet that is fully charged? Millennials, who are the likeliest of all to have been glued to their phone on the way to the airport, at the airport, and in the departure lounge, cannot be expected to interact with on-board connectivity if their pocket friends are low on juice! Unfortunately, wireless in-flight entertainment (W-IFE) and in-flight connectivity (IFC) are often deployed without any means to charge the devices that would be used to access these services.

Level, the low-cost arm of the International Airlines Group (IAG), has also put technology at the forefront of its marketing strategy. Its new on-board payment solution, Pair and Play, allows passengers to pay for food, drinks, Wi-Fi, amenity kits and duty-free goods by pairing their mobile devices to the seatback in-flight entertainment (IFE) system. According to Level, its passengers are largely millennials flying long-haul for the first time and being able to pay from their own device is a way for them to have more control of their own experience.

The word “experience” always features prominently in any marketing spiel explaining an airline’s approach to building rapport with millennials. The theory being that millennials, more so than any other demographic, are driven by an experience and being able to share that experience in the moment on social media. And this, in turn, drives greater recognition of the brand among the target audience and with it, customer loyalty and increased revenue.

Delta Air Lines has noticed younger consumers tend to prefer experiences rather than tactile goods, although it favours the term “Emerging High-Value Customers” (eHVCs) over “millennials”. The Georgia-based carrier sees eHVCs as being much more likely to purchase premium products that will enhance their travel experience and has embarked upon a strategy to attract these high-yield future consumers at an early stage. This is why it has placed so much emphasis on the provision of IFC (more than 1,000 planes are now equipped; many with Gogo’s high-speed 2Ku offering) as a way to take business from competitors who offer slow, unreliable Wi-Fi, or no Wi-Fi at all.

JetBlue Airways would doubtless agree about the importance of good-quality in-flight Internet. Its awarded-winning Fly-Fi service has proven extremely popular and has been credited with boosting the airline’s Net Promoter Score, which is a loyalty metric that measures a customer’s willingness to not only return for another purchase, but also make a recommendation to their family, friends or colleagues. Of course, JetBlue offers customers Fly-Fi for free, and very few airlines do that right now for a variety of reasons. Nonetheless, the tech-savvy millennial is used to ubiquitous and free connectivity on the ground, so why should the aeroplane be any different? JetBlue has sought to offset the considerable costs involved with providing complementary IFC – its sponsorship with Amazon brings in valuable revenues and helps underpin the business model.

We are also seeing airlines having to adapt to the way in which millennials engage with content. American Airlines’ decision to forego seatback screens in favour of W-IFE on its Boeing 737 MAX aircraft in mid-2017 raised questions from some about the future of traditional embedded systems. However, many carriers are installing W-IFE alongside seatback screens, especially on their long-haul aircraft. Philippine Airlines, for example, re-introduced embedded IFE systems onto its A330 aircraft in 2017, alongside ONAIR play, its W-IFE solution. One reason for this trend is to allow for ‘second-screening’, a habit most prevalent amongst millennials where people commonly use their PEDs while watching another screen.

Data science company, Black Swan Data, helped the aforementioned Level take second screening a stage further by enabling pairing of a PED directly to the seat-back system via Pair and Play. JetBlue, meanwhile, is using NFC as a binding technology on its newly-restyled A320s. This allows passengers to use their own devices as remote controls/gaming controllers, port Android-based applications and also, stream content to seatback displays.

IFE content is also changing to meet the needs of a younger audience rather than the baby-boomer generation as has been the case in years gone by. On wide-body aircraft, which typically fly routes long enough for people to watch a Hollywood movie, a growing proportion of the video content available is shorter-form with drama series, documentaries and long-running comedy shows becoming more and more popular. Medieval fantasy epic, Game of Thrones, political dramas like House of Cards, and zombie-apocalyptic horror, The Walking Dead, have all gained cult-like status in recent years and represent examples of the content today’s connected generation are enjoying on the ground. In addition, some companies have begun aggregating YouTube and Vimeo shorter snackable video content and offering customised TV channels to airlines. With this demographic expecting connectivity in the air to be more like it is on the ground, it makes sense that the content they view in the air should be of a similar nature to the content they view in their homes.

Next-generation IFEC systems are being architected so that passengers can create and sign into an IFEC account using their social media credentials, and with permission, these systems can learn even more about passengers from their online profile(s) or even the types of emails they send and receive. As a result, it becomes possible to present ads and content that are more compelling, rather than the same thing across the entire cabin. And this is what the millennial passenger expects – most actually embrace recommendation engines from the likes of Amazon and Netflix.

This familiarity with Amazon and Netflix also has an impact on the way in which GUIs are being designed. A good UI should be pretty, intuitive, snappy and put as little space as possible between the passenger and what he or she wants to watch. Delta Air Lines and Turkish Airlines have undoubtedly taken cues from the VOD giants with their recent GUI redesigns. The former’s new look IFE aims to bring important content to the highest levels for ease of access and feel “more like interacting with an iPhone.” The latter’s is the result of a study conducted by professional usability and user experience laboratories. One of the major updates is category filtering for movies or ratings of TV shows and movies from well-known database, Internet Movie Database (IMDb).

And there is much more to come. Virtual Reality (VR) is experiencing a second coming and is a technology many airlines are looking into today. Intriguingly, VR plays to the perceived traits of millennials as it allows passengers to escape the confines of the cabin and therefore the awkward conversation with a stranger, or family member, millennials supposedly prefer to avoid. Joon has committed to deploying SkyLights’ second-generation cinematic VR headset, AlloSky, this year.

In the coming years, we can expect to see more airlines redefine their brand, processes and service to capture the loyalty of millennials. This will become increasingly important and evident as the influence of millennials on economies across the world strengthens. One need only look to the much-changed retail sector and the disruption caused by Amazon to see that the adoption of technology will be fundamental to airlines delivering a passenger experience worth sharing and coming back for.

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[fusion_builder_container hundred_percent="no" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" parallax_speed="0.3" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" overlay_color="" video_preview_image="" border_size="" border_color="" border_style="solid" padding_top="" padding_bottom="" padding_left="" padding_right=""][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" border_position="all" spacing="yes" background_image="" background_repeat="no-repeat" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="small-visibility,medium-visibility,large-visibility" center_content="no" last="no" min_height="" hover_type="none" link=""][fusion_imageframe image_id="4920|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="center" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]http://217.199.187.200/valourconsultancy.com/wp-content/uploads/2018/02/Millennials-1024x530-1.jpg[/fusion_imageframe][fusion_separator style_type="default" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text] Millennials (also known as Generation Y) are a demographic cohort referred to by some as the “Me, Me, Me Generation” – lazy, constantly seeking feedback and prone to jumping from job to job. Others see a group of liberal and upbeat people brimming with confidence and self-expression, who are most receptive to new ideas and ways of living. Whichever side of the fence you sit on, one undeniable trait of millennials is their enormous purchasing power. For this reason, millennials are one of the most talked about and disruptive generations for businesses globally. Companies, some of which have been household names for generations, have had to fundamentally shift their company culture, redesign products and services, and adopt new, fluid sales channels to resonate with this increasingly important group. Airlines are no exception. Take Joon, Air France’s new low-cost subsidiary, as an example. The airline launched last year and promises to offer “a global travel experience” as opposed to just a flight and a fare. Part of this experience, somewhat bizarrely, involves a troupe of flight attendants decked out in resplendent white trainers, blazers with rolled up sleeves, polo shirts and ankle-length trousers. However, the “experience” element of the new brand goes a little deeper than a chic uniform. All-too-aware that millennials have grown up with an unmatched presence of technology in their lives, Joon has crafted its in-flight entertainment and connectivity (IFEC) offering accordingly. First, all seats are equipped with USB ports to allow in-flight charging of personal electronic devices (PEDs). While this is by no means unique, it does point to an understanding that in-flight Internet and wireless content streaming – both of which are being offered by Joon – go hand-in-hand with in-seat power. After all, who boards a plane with a smartphone or tablet that is fully charged? Millennials, who are the likeliest of all to have been glued to their phone on the way to the airport, at the airport, and in the departure lounge, cannot be expected to interact with on-board connectivity if their pocket friends are low on juice! Unfortunately, wireless in-flight entertainment (W-IFE) and in-flight connectivity (IFC) are often deployed without any means to charge the devices that would be used to access these services. Level, the low-cost arm of the International Airlines Group (IAG), has also put technology at the forefront of its marketing strategy. Its new on-board payment solution, Pair and Play, allows passengers to pay for food, drinks, Wi-Fi, amenity kits and duty-free goods by pairing their mobile devices to the seatback in-flight entertainment (IFE) system. According to Level, its passengers are largely millennials flying long-haul for the first time and being able to pay from their own device is a way for them to have more control of their own experience. The word “experience” always features prominently in any marketing spiel explaining an airline’s approach to building rapport with millennials. The theory being that millennials, more so than any other demographic, are driven by an experience and being able to share that experience in the moment on social media. And this, in turn, drives greater recognition of the brand among the target audience and with it, customer loyalty and increased revenue. Delta Air Lines has noticed younger consumers tend to prefer experiences rather than tactile goods, although it favours the term “Emerging High-Value Customers” (eHVCs) over “millennials”. The Georgia-based carrier sees eHVCs as being much more likely to purchase premium products that will enhance their travel experience and has embarked upon a strategy to attract these high-yield future consumers at an early stage. This is why it has placed so much emphasis on the provision of IFC (more than 1,000 planes are now equipped; many with Gogo’s high-speed 2Ku offering) as a way to take business from competitors who offer slow, unreliable Wi-Fi, or no Wi-Fi at all. JetBlue Airways would doubtless agree about the importance of good-quality in-flight Internet. Its awarded-winning Fly-Fi service has proven extremely popular and has been credited with boosting the airline’s Net Promoter Score, which is a loyalty metric that measures a customer’s willingness to not only return for another purchase, but also make a recommendation to their family, friends or colleagues. Of course, JetBlue offers customers Fly-Fi for free, and very few airlines do that right now for a variety of reasons. Nonetheless, the tech-savvy millennial is used to ubiquitous and free connectivity on the ground, so why should the aeroplane be any different? JetBlue has sought to offset the considerable costs involved with providing complementary IFC – its sponsorship with Amazon brings in valuable revenues and helps underpin the business model. We are also seeing airlines having to adapt to the way in which millennials engage with content. American Airlines’ decision to forego seatback screens in favour of W-IFE on its Boeing 737 MAX aircraft in mid-2017 raised questions from some about the future of traditional embedded systems. However, many carriers are installing W-IFE alongside seatback screens, especially on their long-haul aircraft. Philippine Airlines, for example, re-introduced embedded IFE systems onto its A330 aircraft in 2017, alongside ONAIR play, its W-IFE solution. One reason for this trend is to allow for ‘second-screening’, a habit most prevalent amongst millennials where people commonly use their PEDs while watching another screen. Data science company, Black Swan Data, helped the aforementioned Level take second screening a stage further by enabling pairing of a PED directly to the seat-back system via Pair and Play. JetBlue, meanwhile, is using NFC as a binding technology on its newly-restyled A320s. This allows passengers to use their own devices as remote controls/gaming controllers, port Android-based applications and also, stream content to seatback displays. IFE content is also changing to meet the needs of a younger audience rather than the baby-boomer generation as has been the case in years gone by. On wide-body aircraft, which typically fly routes long enough for people to watch a Hollywood movie, a growing proportion of the video content available is shorter-form with drama series, documentaries and long-running comedy shows becoming more and more popular. Medieval fantasy epic, Game of Thrones, political dramas like House of Cards, and zombie-apocalyptic horror, The Walking Dead, have all gained cult-like status in recent years and represent examples of the content today’s connected generation are enjoying on the ground. In addition, some companies have begun aggregating YouTube and Vimeo shorter snackable video content and offering customised TV channels to airlines. With this demographic expecting connectivity in the air to be more like it is on the ground, it makes sense that the content they view in the air should be of a similar nature to the content they view in their homes. Next-generation IFEC systems are being architected so that passengers can create and sign into an IFEC account using their social media credentials, and with permission, these systems can learn even more about passengers from their online profile(s) or even the types of emails they send and receive. As a result, it becomes possible to present ads and content that are more compelling, rather than the same thing across the entire cabin. And this is what the millennial passenger expects – most actually embrace recommendation engines from the likes of Amazon and Netflix. This familiarity with Amazon and Netflix also has an impact on the way in which GUIs are being designed. A good UI should be pretty, intuitive, snappy and put as little space as possible between the passenger and what he or she wants to watch. Delta Air Lines and Turkish Airlines have undoubtedly taken cues from the VOD giants with their recent GUI redesigns. The former’s new look IFE aims to bring important content to the highest levels for ease of access and feel “more like interacting with an iPhone.” The latter’s is the result of a study conducted by professional usability and user experience laboratories. One of the major updates is category filtering for movies or ratings of TV shows and movies from well-known database, Internet Movie Database (IMDb). And there is much more to come. Virtual Reality (VR) is experiencing a second coming and is a technology many airlines are looking into today. Intriguingly, VR plays to the perceived traits of millennials as it allows passengers to escape the confines of the cabin and therefore the awkward conversation with a stranger, or family member, millennials supposedly prefer to avoid. Joon has committed to deploying SkyLights’ second-generation cinematic VR headset, AlloSky, this year. In the coming years, we can expect to see more airlines redefine their brand, processes and service to capture the loyalty of millennials. This will become increasingly important and evident as the influence of millennials on economies across the world strengthens. One need only look to the much-changed retail sector and the disruption caused by Amazon to see that the adoption of technology will be fundamental to airlines delivering a passenger experience worth sharing and coming back for. [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Sports Continues to Drive Live TV in Commercial Aviation

Valour Consultancy estimates that the live sports segment of the IFE content market was worth $115 million globally in 2017.

After the recent news that IMG would be licensing and airing 250 hours of live coverage for the upcoming winter Olympics in PyeongChang and summer Tokyo Olympics in 2020.

The coverage will be available on 12 airlines, some of which are American Airlines (international flights only), Qatar, Lufthansa, Qatar, Turkish Airlines, and WestJet.

The airlines will have access to 200 hours of Olympic action via IMG’s Sport 24 channel, and an extra 50 hours of coverage on the firm’s latest new channel, Sport 24 Extra.

The global market for sports is expected to be the biggest revenue generator for live TV in the commercial aviation market, and will reach an annual value of nearly $350million by the end of 2026.

It is believed the PyeongChang winter Olympics coverage will be shown on over 700 aircraft, compared to 495 aircraft for the Rio 2016 Olympics.

This service is supported by Panasonics’s eXTV television service, which first started working with IMG in 2012.

In September 2015, Panasonic Avionics and IMG announced that they would be extending their partnership by another five years.

Its eXTV solution consists of a range of programming including live content from Al Jazeera, BBC World News, CNBC, CNN International, EuroNews, NHK World Premium, and Sky News Arabia.

Global Eagle and Gogo are two other companies offering live TV services to airlines.

Valour Consultancy’s latest report, “The Future of In-Flight Entertainment Content” was published in December 2017. The study presents an independent perspective of airline spending on traditional IFE content, and other notable segments, such as moving maps and live TV, as well as ancillary revenue generation. The study breaks out airline spend per segment, the average revenue per order, and number of orders by content segment, region, and aircraft type. For more information, click here.

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[fusion_builder_container hundred_percent="no" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" parallax_speed="0.3" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" overlay_color="" video_preview_image="" border_size="" border_color="" border_style="solid" padding_top="" padding_bottom="" padding_left="" padding_right=""][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" border_position="all" spacing="yes" background_image="" background_repeat="no-repeat" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="small-visibility,medium-visibility,large-visibility" center_content="no" last="no" min_height="" hover_type="none" link=""][fusion_imageframe image_id="4923|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="center" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]http://217.199.187.200/valourconsultancy.com/wp-content/uploads/2018/02/Winter-Olympics-min-1-1024x689-1.jpg[/fusion_imageframe][fusion_separator style_type="default" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text] Valour Consultancy estimates that the live sports segment of the IFE content market was worth $115 million globally in 2017. After the recent news that IMG would be licensing and airing 250 hours of live coverage for the upcoming winter Olympics in PyeongChang and summer Tokyo Olympics in 2020. The coverage will be available on 12 airlines, some of which are American Airlines (international flights only), Qatar, Lufthansa, Qatar, Turkish Airlines, and WestJet. The airlines will have access to 200 hours of Olympic action via IMG’s Sport 24 channel, and an extra 50 hours of coverage on the firm’s latest new channel, Sport 24 Extra. The global market for sports is expected to be the biggest revenue generator for live TV in the commercial aviation market, and will reach an annual value of nearly $350million by the end of 2026. It is believed the PyeongChang winter Olympics coverage will be shown on over 700 aircraft, compared to 495 aircraft for the Rio 2016 Olympics. This service is supported by Panasonics’s eXTV television service, which first started working with IMG in 2012. In September 2015, Panasonic Avionics and IMG announced that they would be extending their partnership by another five years. Its eXTV solution consists of a range of programming including live content from Al Jazeera, BBC World News, CNBC, CNN International, EuroNews, NHK World Premium, and Sky News Arabia. Global Eagle and Gogo are two other companies offering live TV services to airlines. Valour Consultancy’s latest report, “The Future of In-Flight Entertainment Content” was published in December 2017. The study presents an independent perspective of airline spending on traditional IFE content, and other notable segments, such as moving maps and live TV, as well as ancillary revenue generation. The study breaks out airline spend per segment, the average revenue per order, and number of orders by content segment, region, and aircraft type. For more information, click here. [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

How Much Does a Movie License Cost for an Airline?

The task of writing a commercial market research report is both enlightening and punishing.

In the act of completing such studies, one must bombard one’s self with numerous questions, from a multitude of perspectives, evaluating the pros and cons of each, and likely outcomes.

I usually resort to scrying my crystal ball, meditating whilst clasping my plastic human skull (his name is Derrick), and if all else fails, I throw darts at a board to derive my forecast figures.

In the case of completing my recent report, “The Future of In-Flight Entertainment Content”, one particular question proved to be the bane of my existence for a while.

How much does an airline spend on a movie?

The question is simple, the answer very complicated.

Firstly, the types of movies typically shown by an airline can be classified into three categories: early window content (EWC), late window content (LWC), and international movies.

EWC is commonly Hollywood movies that have stopped showing at the theatre but yet to be released to the home entertainment market for sale or rentals.

The period is roughly 4 to 8 weeks, from finishing at a theatre to being releasing to the home entertainment market.

In the past, this period was much greater. Discussing the dynamics of this trend could entail an entire article in itself.

LWC is movies available on the home entertainment market, and older classical movies.

International movies are films released by other movie studios which could be Chinese, Asian, European, African, South American or Indian (typically known as Bollywood).

Unsurprisingly, EWC movies are more expensive to purchase than LWC and other international movies.

Each movie’s price is based on its merits and performances at the box office. However, as a rule of thumb, we believe the price of a LWC movie is approximately 20-30 per cent of an EWC movie.

Other international films are usually 10-25 per cent of an EWC movie, depending on their popularity.

The majority of the Hollywood major six studios negotiate their entertainment deals directly with the airlines, with their content service provider (CSP) providing support where needed.

As such, the bulk of financial payment for the content licensing is calculated by the airline and Hollywood studio.

The main factors for a movie license fee is based upon its box office rating reviews, the routes served, passenger capacity of the aircraft, the number of flights per day, passenger utilisation, likely viewership of movie content by passengers and the average price of movie per passenger.

Obviously, the higher or greater the factor, the more expensive the license.

Interestingly, some airlines will typically avoid the most successful box office movies, under the rationale that most of the passengers on their flight will have seen the movie.

Once a movie license has been acquired, the content provider (studio or content distributor) will pass on the content material to the airline’s CSP, if the airline uses one.

For some of the international movies, a price rate card is set for the title on a per aircraft basis.

As I mentioned above, most of the Hollywood studios negotiate their content directly with the airlines, and thus licensing of their movies and TV shows are bespoke to their respective deals.

For other studios, there are usually three types of license used.

There is a straight distribution, whereupon the license fee to the airline/CSP is split equally.

However, commonly, studios want a flat fee up-front, and allow content distributors to sell their content titles to whichever and wherever the airline is, dependant on the regional licensing.

Finally, some content distributors will offer studios a minimum guarantee, in effect, the content distributor covering a certain portion of the license revenues back to the studio, and only keeping a percentage of the revenues above the minimum. This is more common for international movies.

Finally, to the crux of this article, how much does it cost to license a movie?

In 2017, we estimated the in-flight entertainment (IFE) movie market was worth $425 million, and approximately 200 airlines purchased movies for their entertainment systems.

Taking into account orders on a monthly basis, the average movie license order is $175,000. This covers multiple movies within an order.

EWC movies are of greatest demand, and we estimate around 70 per cent of airline spend on movies are for this type.

We calculated a typically airline purchases 5 EWC movies per order in a month. This equates to roughly £24,472 per movie.

Readers should note, that the number of movies an airline like Emirates purchases compared to say. SAS, is very large. In all likelihood, Emirates will purchase licenses for all of the Hollywood studio’s movies released in a given year. SAS, on the other hand, will not.

The remaining order will be spent on LWC and other international movie titles. Of these titles, we believe roughly 15 movies will purchased per order, at a much lower price.

Examining our average license order in 2017, this leaves $52,440 for other movie titles, and equates to $3,496 per movie title.

LWC movies tends to be a little bit more expensive than international films, however, for this piece, we will assume it is roughly the same.

The simplicity of these calculations makes the answer to this article’s title seem, well, like a walk in the park. It’s not.

Calculation Conundrum Time

What Emirates will pay to license a movie, particularly a EWC movie, is much different from a smaller airline.

In the entertainment movie business, the negotiations are highly secretive, and how each studio prices its content varies significantly.

Some movies are priced on a stand-alone basis, others in package deals, and the rest in an ad-hoc manner.

Nevertheless, I shall endeavour to shed some light upon this, dazzlingly or dimly, you can decide.

As I have already mentioned, Emirates and SAS, and it would be wise to talk about another airline, and as a proud English person, I thought British Airways would provide an excellent example for answering my question.

It’s the national airline carrier for the United Kingdom, and part of the IAG group. The carrier has one of the largest fleets in the world.

It has five Airbus aircraft types, seven Boeing aircraft types, and two Embraer aircraft types.

British Airways serves a multitude of locations around the world, from a quick perusal of its route map, 41 destinations spring to view.

For the carrier’s, longer flight destinations, it deploys a number of different aircraft type but for this example, we will use its Airbus A380-800 and Boeing 777-300 aircraft, of which it each has twelve.

The Airbus A380 can hold 469 passengers, and the Boeing 777-300, up to 299 passengers, according to the British Airways website.

Calculating the a EWC license for a movie includes passenger capacity, number of aircraft, flights per month, days in a month, passenger load factor (PLF), viewership numbers, and price per passenger (derived from its box office performance). We will exclude any premiums for geographical regions served.

Table 1 presents these factors for the following aforementioned aircraft types by these factors.

Aircraft Type A380-800 Boeing 777-300
Number of Passengers 469 299
Number of Aircraft 12 12
Flights per day 1.5 1.5
Average Days per Month 30.42 30.42
Passenger Utilisation 85% 85%
Passenger Viewership of Movies 70% 70%
Movie Price per Passenger $0.40 $0.40
 
Movie License Price Per Month $61,113 $38,961

Calculating the movie price per passenger has involved a few assumptions, and some aid from Derrick. I have assumed that the average theatre price for a movie is $10, and the movie studio would receive approximately 40 per cent of the ticket price ($4).

As an EWC movie has already stopped showing at the theatre, and taking into account the environment the movie is being show in (the passenger is watching a movie on a small IFE display rather than a gigantic cinema screen), I have factored that the movie price would be significantly lower than a theatre’s.

In this example, 10 per cent of the takings, so 40 cents per passenger on average.

On reflection, Hollywood studios alter the movie price per passenger depending on their perceived value/demand of the movie. The latest Guardians of Galaxy Vol.2 may be charged at 65 cents per passengers, whilst a less notable movie, at 35 cents per passenger.

So to conclude this article, the average price for an EWC movie is approximately $24,472 per movie, but if you’re an airline with very large aircraft, such as British Airways, wanting to license a movie for all its A380-800 aircraft, a movie license would be approximately $61,113 per movie, and/or $38,961 for its Boeing 777-300.

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[fusion_builder_container hundred_percent="no" equal_height_columns="no" menu_anchor="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" background_color="" background_image="" background_position="center center" background_repeat="no-repeat" fade="no" background_parallax="none" parallax_speed="0.3" video_mp4="" video_webm="" video_ogv="" video_url="" video_aspect_ratio="16:9" video_loop="yes" video_mute="yes" overlay_color="" video_preview_image="" border_size="" border_color="" border_style="solid" padding_top="" padding_bottom="" padding_left="" padding_right=""][fusion_builder_row][fusion_builder_column type="1_1" layout="1_1" background_position="left top" background_color="" border_size="" border_color="" border_style="solid" border_position="all" spacing="yes" background_image="" background_repeat="no-repeat" padding_top="" padding_right="" padding_bottom="" padding_left="" margin_top="0px" margin_bottom="0px" class="" id="" animation_type="" animation_speed="0.3" animation_direction="left" hide_on_mobile="small-visibility,medium-visibility,large-visibility" center_content="no" last="no" min_height="" hover_type="none" link=""][fusion_imageframe image_id="4926|full" max_width="" style_type="" blur="" stylecolor="" hover_type="none" bordersize="" bordercolor="" borderradius="" align="center" lightbox="no" gallery_id="" lightbox_image="" lightbox_image_id="" alt="" link="" linktarget="_self" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""]http://217.199.187.200/valourconsultancy.com/wp-content/uploads/2018/02/Movies-for-Blog-min-1024x576-1.jpg[/fusion_imageframe][fusion_separator style_type="default" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" sep_color="#ffffff" top_margin="20" bottom_margin="20" border_size="" icon="" icon_circle="" icon_circle_color="" width="" alignment="center" /][fusion_text columns="" column_min_width="" column_spacing="" rule_style="default" rule_size="" rule_color="" hide_on_mobile="small-visibility,medium-visibility,large-visibility" class="" id="" animation_type="" animation_direction="left" animation_speed="0.3" animation_offset=""] The task of writing a commercial market research report is both enlightening and punishing. In the act of completing such studies, one must bombard one’s self with numerous questions, from a multitude of perspectives, evaluating the pros and cons of each, and likely outcomes. I usually resort to scrying my crystal ball, meditating whilst clasping my plastic human skull (his name is Derrick), and if all else fails, I throw darts at a board to derive my forecast figures. In the case of completing my recent report, “The Future of In-Flight Entertainment Content”, one particular question proved to be the bane of my existence for a while. How much does an airline spend on a movie? The question is simple, the answer very complicated. Firstly, the types of movies typically shown by an airline can be classified into three categories: early window content (EWC), late window content (LWC), and international movies. EWC is commonly Hollywood movies that have stopped showing at the theatre but yet to be released to the home entertainment market for sale or rentals. The period is roughly 4 to 8 weeks, from finishing at a theatre to being releasing to the home entertainment market. In the past, this period was much greater. Discussing the dynamics of this trend could entail an entire article in itself. LWC is movies available on the home entertainment market, and older classical movies. International movies are films released by other movie studios which could be Chinese, Asian, European, African, South American or Indian (typically known as Bollywood). Unsurprisingly, EWC movies are more expensive to purchase than LWC and other international movies. Each movie’s price is based on its merits and performances at the box office. However, as a rule of thumb, we believe the price of a LWC movie is approximately 20-30 per cent of an EWC movie. Other international films are usually 10-25 per cent of an EWC movie, depending on their popularity. The majority of the Hollywood major six studios negotiate their entertainment deals directly with the airlines, with their content service provider (CSP) providing support where needed. As such, the bulk of financial payment for the content licensing is calculated by the airline and Hollywood studio. The main factors for a movie license fee is based upon its box office rating reviews, the routes served, passenger capacity of the aircraft, the number of flights per day, passenger utilisation, likely viewership of movie content by passengers and the average price of movie per passenger. Obviously, the higher or greater the factor, the more expensive the license. Interestingly, some airlines will typically avoid the most successful box office movies, under the rationale that most of the passengers on their flight will have seen the movie. Once a movie license has been acquired, the content provider (studio or content distributor) will pass on the content material to the airline’s CSP, if the airline uses one. For some of the international movies, a price rate card is set for the title on a per aircraft basis. As I mentioned above, most of the Hollywood studios negotiate their content directly with the airlines, and thus licensing of their movies and TV shows are bespoke to their respective deals. For other studios, there are usually three types of license used. There is a straight distribution, whereupon the license fee to the airline/CSP is split equally. However, commonly, studios want a flat fee up-front, and allow content distributors to sell their content titles to whichever and wherever the airline is, dependant on the regional licensing. Finally, some content distributors will offer studios a minimum guarantee, in effect, the content distributor covering a certain portion of the license revenues back to the studio, and only keeping a percentage of the revenues above the minimum. This is more common for international movies. Finally, to the crux of this article, how much does it cost to license a movie? In 2017, we estimated the in-flight entertainment (IFE) movie market was worth $425 million, and approximately 200 airlines purchased movies for their entertainment systems. Taking into account orders on a monthly basis, the average movie license order is $175,000. This covers multiple movies within an order. EWC movies are of greatest demand, and we estimate around 70 per cent of airline spend on movies are for this type. We calculated a typically airline purchases 5 EWC movies per order in a month. This equates to roughly £24,472 per movie. Readers should note, that the number of movies an airline like Emirates purchases compared to say. SAS, is very large. In all likelihood, Emirates will purchase licenses for all of the Hollywood studio’s movies released in a given year. SAS, on the other hand, will not. The remaining order will be spent on LWC and other international movie titles. Of these titles, we believe roughly 15 movies will purchased per order, at a much lower price. Examining our average license order in 2017, this leaves $52,440 for other movie titles, and equates to $3,496 per movie title. LWC movies tends to be a little bit more expensive than international films, however, for this piece, we will assume it is roughly the same. The simplicity of these calculations makes the answer to this article’s title seem, well, like a walk in the park. It’s not.

Calculation Conundrum Time

What Emirates will pay to license a movie, particularly a EWC movie, is much different from a smaller airline. In the entertainment movie business, the negotiations are highly secretive, and how each studio prices its content varies significantly. Some movies are priced on a stand-alone basis, others in package deals, and the rest in an ad-hoc manner. Nevertheless, I shall endeavour to shed some light upon this, dazzlingly or dimly, you can decide. As I have already mentioned, Emirates and SAS, and it would be wise to talk about another airline, and as a proud English person, I thought British Airways would provide an excellent example for answering my question. It’s the national airline carrier for the United Kingdom, and part of the IAG group. The carrier has one of the largest fleets in the world. It has five Airbus aircraft types, seven Boeing aircraft types, and two Embraer aircraft types. British Airways serves a multitude of locations around the world, from a quick perusal of its route map, 41 destinations spring to view. For the carrier’s, longer flight destinations, it deploys a number of different aircraft type but for this example, we will use its Airbus A380-800 and Boeing 777-300 aircraft, of which it each has twelve. The Airbus A380 can hold 469 passengers, and the Boeing 777-300, up to 299 passengers, according to the British Airways website. Calculating the a EWC license for a movie includes passenger capacity, number of aircraft, flights per month, days in a month, passenger load factor (PLF), viewership numbers, and price per passenger (derived from its box office performance). We will exclude any premiums for geographical regions served. Table 1 presents these factors for the following aforementioned aircraft types by these factors.
Aircraft Type A380-800 Boeing 777-300
Number of Passengers 469 299
Number of Aircraft 12 12
Flights per day 1.5 1.5
Average Days per Month 30.42 30.42
Passenger Utilisation 85% 85%
Passenger Viewership of Movies 70% 70%
Movie Price per Passenger $0.40 $0.40
 
Movie License Price Per Month $61,113 $38,961
Calculating the movie price per passenger has involved a few assumptions, and some aid from Derrick. I have assumed that the average theatre price for a movie is $10, and the movie studio would receive approximately 40 per cent of the ticket price ($4). As an EWC movie has already stopped showing at the theatre, and taking into account the environment the movie is being show in (the passenger is watching a movie on a small IFE display rather than a gigantic cinema screen), I have factored that the movie price would be significantly lower than a theatre’s. In this example, 10 per cent of the takings, so 40 cents per passenger on average. On reflection, Hollywood studios alter the movie price per passenger depending on their perceived value/demand of the movie. The latest Guardians of Galaxy Vol.2 may be charged at 65 cents per passengers, whilst a less notable movie, at 35 cents per passenger. So to conclude this article, the average price for an EWC movie is approximately $24,472 per movie, but if you’re an airline with very large aircraft, such as British Airways, wanting to license a movie for all its A380-800 aircraft, a movie license would be approximately $61,113 per movie, and/or $38,961 for its Boeing 777-300. [/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]