BUSINESSWEEK ONLINE : AUGUST 28, 2000 ISSUE
INDUSTRIES Surf the Web in the Air Inflight multimedia moves to a whole new level Remember when flying was an exercise in isolation, G-rated movies, and mediocre food? Not any more. The meals may not be any better, but inflight entertainment and communications systems are improving fast, and within a few years will rival those in your home and office. ''We're bringing the rest of the world into the aircraft,'' says Jeff Wales, CEO of In-Flight Network, a joint venture of Rockwell Collins and News Corp. The new systems aim to turn passengers' seats into private multimedia cocoons. Video-on-demand terminals are getting more common in business and first class. And down the road, they will become standard in economy, too. Now the carriers are racing to deliver real-time data and broadcast links from the plane to the outside world. So if scores of movies aren't enough, passengers will soon be able to surf the Web at high speeds and watch news as it breaks. ''The sky's becoming the network,'' says Kevin Munday, technical marketing manager at Matsushita Avionics Systems Corp. ''Not the limit.'' Airlines once ranked bigger seats and better food well ahead of inflight entertainment as top priorities to woo upscale travelers. But now inflight information services are becoming more critical--and capital-intensive. According to the World Airline Entertainment Assn., a trade group, spending on these systems soared to more than $2.1 billion in 1999, up from $400 million in 1992. With all the competition among airlines, the growth is unlikely to slow anytime soon, says Wale Adepoju, an independent inflight consultant in London. Whereas a plane needed a single movie and three overhead projectors just five years ago, ''now, they have to put expensive technology in each seat and stock these 100-channel systems with plenty of media,'' he says. NEW CONTENT CROP. All this growth has shaken the traditionally sleepy world of inflight entertainment. Everyone from Matsushita and Mitsubishi to Rockwell International (ROK) and Boeing (BA) is vying to connect to--and cash in on--some 45 million flyers a year. And the promise of sky-high Internet connectivity has lured a new crop of ''content'' providers to sniff around the market. News Corp. (NWS), NBC (GE), and CNN (TWX) are vying for an airborne information market that analysts expect to top $70 billion a year in 10 years. For now, Matsushita commands about two-thirds of the market for advanced inflight entertainment systems, with nearly 600 aircraft flown by 50 airlines using one of its rigs. Singapore Airlines Ltd., for example, is spending $27,500 per seat on Matsushita's most advanced system to upgrade many of its New York flights (page 214D). But Matsushita's dominance is being challenged--on two fronts at once. Rockwell Collins, the aviation-electronics subsidiary of Rockwell International Corp., is acquiring Sony Trans Com, which produces Passport, the No. 2 inflight-entertainment system. Rockwell estimates that the combination of Passport and its own product will generate revenues of more than $500 million annually by 2001. Rockwell's systems have matched Matsushita's by providing video and audio entertainment capabilities, telephones, and such options as video-on-demand, real-time airborne Internet, and e-mail capabilities. But recently, the Cedar Rapids (Iowa) company went a step further, launching a joint venture to supply media to airborne entertainment systems. Teaming up with News Corp., Rockwell Collins created In-Flight Network, based in Beverly Hills, Calif., to provide airlines with multiple channels of live television and, better yet, Internet access supported by advertising. CAPTIVE AUDIENCE. The system will allow passengers to log on through a wireless network on the plane. Passengers will pay a nominal fee to use the service through their own laptop computers, personal digital assistants, or cell phones from aircraft and airports. By linking the plane's antennae with existing geosynchronous and low earth orbit satellite networks, In-Flight expects to offer connection speeds as high as a cable modem--meaning upwards of one megabit per second. A plane full of captive travelers could be quite alluring to advertisers, especially since the Web pages that passengers see can be tailored to their destination, be it a trade show, tourist site, or even just a city that wishes to publicize its amenities. And since the content is stored and updated on servers on the ground--not on the plane--ads and features can be changed as quickly as the plane changes destinations, or even inflight. ''Broadcasters have concentrated on reaching the home, the hearth, and the living room,'' says Wales. ''Now we can offer advertisers the huge, upscale captive audience of airline passengers.'' In-Flight estimates that between 10 million and 25 million frequent fliers would be willing to ante up for airborne e-mail access. In the meantime, a determined competitor is already on In-Flight's tail. Boeing Co. recently acquired Hughes Space & Communications to give it an entree into commercial, space-based communications markets. Now, Boeing is developing Connexion, a consortium that includes Matsushita and Mitsubishi Electric Corp., to develop a satellite network that will compete with In-Flight. It, too, will offer high-bandwidth, real-time delivery of Internet, TV, and other media. On the content side, the venture has attracted interest from CNN and CNBC. The system already works in private jets. Commercial carriers in North America are slated to be online in late 2001. In-Flight has announced an equally ambitious rollout. The company tested its technology on planes in June and plans to provide demonstrations to civil aviation officials and entertainment industry leaders this fall. If things go according to plan, the first aircraft equipped with the service will be in the air at the end of next year. Of course, new gadgets alone won't make flying any less mundane. They won't ease the frustrations of runway delays and surly flight attendants. But at least, when the plane goes into a holding pattern because of far-off thunderstorms, you will be able to phone home, e-mail the boss, reschedule that meeting, and tell the limo driver when to show up at the airport. Then, just sit back, pick another movie, and relax. By Alan Hall in New York _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Surf the Web in the Air Digital Downloads at 27,000 Feet INTERACT E-Mail to Business Week Online

Copyright 2000-2008, by The McGraw-Hill Companies Inc. All rights reserved. Terms of Use   Privacy Notice