Originally Posted by ExDL
Smart move by United for several reasons.
- High value, business travelers skew heavily to mobile technology, specifically iOS devices.
- Some companies lock down their employees' apps, but do permit travel apps. By pushing content directly through United's offering, they may be able to service customers who could not access Netflix, etc. Keeping business travelers happy is how airlines make money.
- A happy business traveller could use this service as a differentiator when booking travel for a family vacation; it's now even easier to give the kids an iPad and keep them occupied on the plane.
- This will spur adoption of the United app, and the associated cost benefits it brings (paper boarding passes are a surprising cost sink).
- Each aircraft's reliance on seat back TVs will decrease dramatically. These systems are very expensive, relatively heavy, and difficult to maintain. Flight crews hate having to try and troubleshoot them too and when a unit fails, it is a terrible customer experience. By eliminating televisions and adopting a BYOD model, United can shift the entertainment burden to their passengers, and perhaps focus on just providing power to each seat.
- Encouraging passengers to connect to the plane's Wi-Fi may open future revenue streams. Perhaps a business traveller will go ahead and buy a data package and get some work done once he/she is already connected.
- Once customers get used to streaming free content through the United app, it creates opportunity to up-charge for premium content. Sure, 150 movies are free, but would you pay $5 to watch a very recent theater release? (I would, especially if I could iTunes/iWallet/TouchID the transaction.)
- I assume United found a way to host of the content locally and stream it over Wi-Fi. Current bandwidth to airplanes is very limited, so each passenger streaming data is unlikely to be a good experience. Each plane's content can be refreshed once a month, similar to what is practiced now.
- Lastly, by routing viewer traffic through United's app, the airline can gather hyper-detailed data on passenger behavior. This has tremendous value to the airline's marketing partners and is not currently possible with seat-back systems. United will be able to link gender, age, time of day, content preferences, email addresses...you name it. (Let's hope they're good stewards of this info.)
All in all, congratulations to United...this feels big and I hope everyone copies it.