Creating New Interfaces Between Large Aviation Organisations And The Growing Global Travel Technology Scene

Transcript

Kevin Clark:So Bluebox Aviation Systems is a technology company. We supply in-flight entertainment systems to airlines across the world, such as British Airways, Hawaiian Airlines, Solaseed in Japan. All of our products are in the portable space, so we supply systems that support portable in-flight entertainment. So that'd be at one end, we have iPads which are preloaded with content and handed out, by airlines to their passengers in all classes. We also provide wireless streaming systems, and our most successful product recently is a portable wireless streaming system which delivers a network through the cabin out of a portable unit that's generally held in the overhead bin, and passengers connect to that with their own device, or it could be a device supplied by the airline, and they stream content directly to those devices. Systems like this are generally used by airlines for a number of different activities. It could be what we call service enhancements. So there maybe isn't already a system in the aircraft. An airline will deploy a system like this to deliver IFE through that cabin very easily in a low-cost way. It can also be used for ancillary revenue generation. So airlines may use the system to both deliver content but also provide ancillary revenue through advertising or paid-for access, or more progressively, things like shopping and more enhanced experiences. One of the most fastest-growing parts of the market is the low-cost carrier market, and low-cost carriers find solutions such as this very attractive because they can be deployed quickly, they aren't subject to the same certification as fitted systems are, so they can deploy them quickly at much lower cost and indeed even move them around between aircraft and between services. So we find some carriers, particularly in the LCC space, are interested on the particular routes they wish to deploy these systems rather than just particular aircraft, as would be the case with a traditional fitted IFE system. So trends in IFE, in terms of what passengers see, the content mix is changing quite dramatically and has changed quite dramatically in the last few years. So traditional IFE systems typically will deliver movies, some television programs, and maybe some audio. And of course, that's all available in the newer systems. But what we're also seeing is new types of content, shorter content, what we call snackable content, maybe curated YouTube-type video content where passengers will surf in and out of that content and And that ties in with the fact that they may actually have multiple devices that they're using at the same time. So from a content point of view, the content is getting broader, more sophisticated, and the way in which airlines are delivering that content as well is becoming more sophisticated as well. So to take the snackable content I mentioned earlier, the thing about small content items is passengers are moving between content items more rapidly than perhaps they would if they were watching a movie. And as you move between a content item, that's an opportunity to present an advert, which would come down to an ancillary revenue potential there. So the types of airlines that are deploying systems are using the content also to try and maximize the ancillary revenue that's available to them. Our market is global, so we supply airlines all over the world, and our customers are all over the world. But if you look at growth poles and where we are seeing the greatest depth of interest for us, you know, places like Asia, the Asian market, which of course has a higher proportion of LCCs than elsewhere in the world, is a big market for us. And in fact, in the last month, we've sent systems out to— in fact, the last 3 carriers we've deployed have all been Asian carriers. So in terms of growth poles for our business, yes, it is a pole, but I can't underestimate in terms of the scale of the industry, you know, traditional IFE systems would normally be applicable to maybe 200, 230 airlines if you look at traditional systems. If you look at the systems that we offer right now, which are portable, those apply to airlines over a much broader spectrum. So we reckon there's maybe somewhere in the region of 700 to 800 airlines that have an interest in what we have to offer. Many of those are leisure carriers or LCCs, and to your question, yes, many of those are in the Asian region as well. The content world in the airline space is fairly well developed, so there are There are organizations out there whose entire business is about licensing content based on, you know, the airline, where it's going to be used, and the types of content that is available. So although it's a complicated area, the content world is actually quite sophisticated and quite well structured. Some of the newer content types are a little bit more difficult. So if you move from video into print media or electronic equivalent of print media, that's actually more complicated than video. distribution because the license holder might be different in a particular region, might be different from the publisher. So we do have to be sensitive when deploying units that the content that's going on the units is licensed for the area. And the best way to do that is by the engagement of content service providers. Yes, streaming services have become a bigger part of the education landscape in recent years, and I think that's helpful for us because some of the streaming services are getting into commissioning their own work, and that content becomes available in the aircraft, it is possible as the content providers are sourcing content, they can go to new vendors or new providers of content rather than maybe some of— as well as rather some of the traditional providers. So it certainly broadens the scope. I don't think, certainly in the near-term horizon, we don't ever see the likelihood of the mass deployment of content streamed directly from the ground. It's just that bandwidth that would deliver that capability, while technically possible, is incredibly expensive and the business case doesn't does not support that in this case, but in terms of making more content available, you know, the more content creators or commissioners there are, then the more interesting the landscape is.

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