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All Change for Pricing and Consumption of Early-Window Content?

As I continue to work on our 2020 update of Valour’s “The Future of In-Flight Entertainment (IFE) Content” report, a number of interesting themes are emerging in the context of what will drive a recovery and, subsequently, the future growth of this sector. I’ll save most of the findings for the report itself, but I did want to share one point of view linked to early-window content (EWC), typically the darling, and most expensive form, of an airline’s IFE offering, because it is becoming increasingly apparent that the way EWC is priced today looks set to change. Yes, COVID-19 has had some bearing on this, but a bigger factor is the changes being made by some of the “Big Five” studios to the way in which brand new blockbusters are served up to and consumed by the masses.

COVID-19 Encouraging Passengers to Use Portable Electronic Devices (PEDs)

As highlighted in another of our recent blogs which speculates the new normal for the passenger experience (https://valourconsultancy.com/re-imagining-the-passenger-experience-in-a-post-coronavirus-world/), when passengers do return to the skies, the expectation is that there will be a greater attention paid to the immediate surroundings, in particular who and what a passenger comes in contact with during a flight. The cleanliness of any communal surface, of which there are plenty in the cabin, will now be under greater scrutiny, and the seatback IFE screen, easily the most popular (and often only) method of accessing and navigating the abundance of IFE content on a long haul flight, is no exception.

In the context of EWC, a worst-case scenario for content service providers (CSPs) and airlines is the new normal causes eyeballs to shift away from the main screen and onto other sources of entertainment, more specifically PEDs, devaluing this content in the process. With passenger traffic substantially down, and the potential for a segment of those that do fly not wanting to use the seatback system, how long can the high cost of EWC stand up to scrutiny? In my opinion, airlines have a couple of options to increase viewership figures; reassure passengers that the IFE screens are clean and safe to use and/or provide an alternative solution that facilitates access to the onboard entertainment, without the need to physically interact with the seatback screen.

In the case of the former, many airlines have been quick to adopt and publicise deep-cleaning processes aimed at going above and beyond standard cabin cleaning to ease passenger concerns. Etihad Airlines, for example, announced it will provide passengers with anti-bacterial wipes upon boarding that can be used to clean the immediate area around the seat. Delta Air Lines, meanwhile, has deployed an enhanced fogging and disinfecting process for all customer touchpoints, including seatback IFE screens. Secondly, several airlines were in the process of deploying technology that allows PED’s to be paired with seatback systems and to be used as a controller. One example is Singapore Airline’s which has installed Panasonic’s eX3 system on its A350 aircraft. The IFE platform can be paired with the airline’s popular companion app to enable, amongst other things, control, and navigation of the embedded screen.

Another option worth mentioning here is Wireless In-Flight Entertainment (W-IFE), which has been deployed by more than 140 airlines according to our Q4 2019 W-IFE tracker data. W-IFE allows passengers to stream most of an airline’s content portfolio directly to their own PEDs. However, streaming of prized EWC is prohibited by the “Big Five” Hollywood studios, driven by lingering fears around piracy. But this stance isn’t perhaps as solid as what it once was and there have been some isolated cases where specific deals have been put in place between an individual CSP and one or more studios to stream EWC over W-IFE. An example is Inflight Dublin, which has struck a deal with some studios to show newer titles on its Everhub W-IFE platform.

Whilst W-IFE adoption has increased significantly in recent years, some may argue that adoption could be more widespread had it not been for the traditional stance of the “Big Five” studios around EWC. But, in what could be a well-timed change of heart for all involved, the deadlock on this issue could be about to break.

Decision Making by Hollywood Studios

In March 2020, Universal Pictures announced it would alter its release strategy for ‘Trolls World Tour’ during the COVID-19 crisis, foregoing a theatrical release and allowing consumers to stream the film direct to home via digital rental. Disney and Warner Bros. have since followed Universal’s lead, announcing they would release ‘Artemis Fowl’ and ‘Scoob!’ to the home streaming market and bypass a cinema release whilst coronavirus social distancing measures were still in place. Universal’s decision led to Trolls World Tour generating over $100 million USD in the first three weeks of its home release. But, most importantly in the context of this blog, foregoing a theatrical release also reduces the “exclusive” nature of this content.

This scenario brings two considerations into play, firstly, studios could now be less protective of EWC and therefore more inclined to permit streaming onto PEDs. Afterall, the exclusivity factor was one of the key reasons to keep this type of content tied to IFE seatback screens. Secondly, we could be about to see a significant reduction in the cost of EWC, driven by airlines being less willing to pay for titles that are already available for consumers to watch at home.

Looking ahead it is unlikely Hollywood will send all titles direct to home but could certainly do so for those films not expected to break box office records. There are potential cost savings attached to these titles that would certainly be welcomed by airlines and CSP’s alike in the current situation. With that comes the prospect of a positive headline in an otherwise gloomy time for the industry.

To find out more about Valour’s IFE Content predictions, including 10 year forecasts out to 2029, please email: william.calvert@valourconsultancy.com to discuss the ‘Future of IFE Content – 2020’ report.

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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_text] As I continue to work on our 2020 update of Valour’s “The Future of In-Flight Entertainment (IFE) Content” report, a number of interesting themes are emerging in the context of what will drive a recovery and, subsequently, the future growth of this sector. I’ll save most of the findings for the report itself, but I did want to share one point of view linked to early-window content (EWC), typically the darling, and most expensive form, of an airline’s IFE offering, because it is becoming increasingly apparent that the way EWC is priced today looks set to change. Yes, COVID-19 has had some bearing on this, but a bigger factor is the changes being made by some of the “Big Five” studios to the way in which brand new blockbusters are served up to and consumed by the masses.

COVID-19 Encouraging Passengers to Use Portable Electronic Devices (PEDs)

As highlighted in another of our recent blogs which speculates the new normal for the passenger experience (https://valourconsultancy.com/re-imagining-the-passenger-experience-in-a-post-coronavirus-world/), when passengers do return to the skies, the expectation is that there will be a greater attention paid to the immediate surroundings, in particular who and what a passenger comes in contact with during a flight. The cleanliness of any communal surface, of which there are plenty in the cabin, will now be under greater scrutiny, and the seatback IFE screen, easily the most popular (and often only) method of accessing and navigating the abundance of IFE content on a long haul flight, is no exception. In the context of EWC, a worst-case scenario for content service providers (CSPs) and airlines is the new normal causes eyeballs to shift away from the main screen and onto other sources of entertainment, more specifically PEDs, devaluing this content in the process. With passenger traffic substantially down, and the potential for a segment of those that do fly not wanting to use the seatback system, how long can the high cost of EWC stand up to scrutiny? In my opinion, airlines have a couple of options to increase viewership figures; reassure passengers that the IFE screens are clean and safe to use and/or provide an alternative solution that facilitates access to the onboard entertainment, without the need to physically interact with the seatback screen. In the case of the former, many airlines have been quick to adopt and publicise deep-cleaning processes aimed at going above and beyond standard cabin cleaning to ease passenger concerns. Etihad Airlines, for example, announced it will provide passengers with anti-bacterial wipes upon boarding that can be used to clean the immediate area around the seat. Delta Air Lines, meanwhile, has deployed an enhanced fogging and disinfecting process for all customer touchpoints, including seatback IFE screens. Secondly, several airlines were in the process of deploying technology that allows PED’s to be paired with seatback systems and to be used as a controller. One example is Singapore Airline’s which has installed Panasonic’s eX3 system on its A350 aircraft. The IFE platform can be paired with the airline’s popular companion app to enable, amongst other things, control, and navigation of the embedded screen. Another option worth mentioning here is Wireless In-Flight Entertainment (W-IFE), which has been deployed by more than 140 airlines according to our Q4 2019 W-IFE tracker data. W-IFE allows passengers to stream most of an airline’s content portfolio directly to their own PEDs. However, streaming of prized EWC is prohibited by the “Big Five” Hollywood studios, driven by lingering fears around piracy. But this stance isn’t perhaps as solid as what it once was and there have been some isolated cases where specific deals have been put in place between an individual CSP and one or more studios to stream EWC over W-IFE. An example is Inflight Dublin, which has struck a deal with some studios to show newer titles on its Everhub W-IFE platform. Whilst W-IFE adoption has increased significantly in recent years, some may argue that adoption could be more widespread had it not been for the traditional stance of the “Big Five” studios around EWC. But, in what could be a well-timed change of heart for all involved, the deadlock on this issue could be about to break.

Decision Making by Hollywood Studios

In March 2020, Universal Pictures announced it would alter its release strategy for ‘Trolls World Tour’ during the COVID-19 crisis, foregoing a theatrical release and allowing consumers to stream the film direct to home via digital rental. Disney and Warner Bros. have since followed Universal’s lead, announcing they would release ‘Artemis Fowl’ and ‘Scoob!’ to the home streaming market and bypass a cinema release whilst coronavirus social distancing measures were still in place. Universal’s decision led to Trolls World Tour generating over $100 million USD in the first three weeks of its home release. But, most importantly in the context of this blog, foregoing a theatrical release also reduces the “exclusive” nature of this content.
This scenario brings two considerations into play, firstly, studios could now be less protective of EWC and therefore more inclined to permit streaming onto PEDs. Afterall, the exclusivity factor was one of the key reasons to keep this type of content tied to IFE seatback screens. Secondly, we could be about to see a significant reduction in the cost of EWC, driven by airlines being less willing to pay for titles that are already available for consumers to watch at home. Looking ahead it is unlikely Hollywood will send all titles direct to home but could certainly do so for those films not expected to break box office records. There are potential cost savings attached to these titles that would certainly be welcomed by airlines and CSP’s alike in the current situation. With that comes the prospect of a positive headline in an otherwise gloomy time for the industry. To find out more about Valour’s IFE Content predictions, including 10 year forecasts out to 2029, please email: william.calvert@valourconsultancy.com to discuss the ‘Future of IFE Content – 2020’ report. [/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]