We had a vision when we came to market in 2008. We thought the market was going to demand free Wi-Fi in really high quality that allowed you do anything you want, including streaming.
JetBlue has gone fully fast and free, Delta has, and a lot of U.S. airlines are now following suit. With us, American Airlines has announced they’re going to go fast and free for AAdvantage members in January. Southwest Airlines, a big client of ours, has announced they’re going to go with full fast and free – tying it into their loyalty.
Once, just having Wi-Fi was good enough to do text messages, maybe an email, or check the latest sports scores. Now that’s no longer good enough.
You’re going to see fast and free Wi-Fi in mass. The U.S. is leading it but you’re now seeing it around the world.
From a passenger’s perspective, now it has to work. It has to be reliable. It has to get done what I want to get done. That could be work, my social media, or it could be catching up on long-form video streaming – downloading and uploading. All that has to work. If it doesn’t, passengers hold the airline accountable.
Paradigm shift
There’s been this big shift. I think the rest of the world wasn’t quite sure how important inflight connectivity was to the market. I think, over the last year, there’s a realisation that it’s here and it has to be good.
We move a lot of content around. It used to be movies and TV shows. Even advertising got updated through a thumb drive.
Someone ran out to the aircraft once a month and downloaded it for five or six hours. Now we’re doing that in the background as a plane flies around.
All the content is getting uploaded to the aircraft behind the scenes at very low marginal cost. There are no humans involved on the ground, so it’s letting crew focus on the task at hand: aircraft maintenance. They don’t have to be distracted by other things. The aircraft gets turned the airline operations get better.
Aircraft data is getting offloaded, whether it be charts coming in, getting integrated EFBs [Electronic Flight Bags], getting weather to the cockpit for turbulence avoidance or better fuel planning. You can really optimise your flight path to optimise around fuel burn – next to labour, it’s the biggest cost in any airline around the world.
Viasat’s Connected Partner Platform
Through our Connected Partner Platform, we’re allowing third-party software developers to rent space on a server. That allows them to get their software in front of customers or airlines. It could be for operational use or for the passenger.
We have partners who deliver food and beverages to the seat via an application. FlightPath3D is another company that we’re hosting as a third-party portal, as a connected partner on our server.
ViaSat-3 is a terabit per second satellite. It more than doubles what Viasat’s brought to orbit so far: the sheer amount of capacity, the coverage area, and it’s also very flexible.
The capacity, basically, follows the airplanes. Instead of the capacity being fixed on the ground, like legacy satellites are, this basically goes with the demand. As the planes and the density flies around, this is constantly following it in real-time. So you don’t have any wasted bandwidth. All the bandwidth is being used by a real user all the time.
Beam-forming happens on the ground and on the satellite. So the ground works in concert with the satellite to figure out where the demand’s at and whether the terminal was fixed or in motion. It sets up the resources on a satellite in real-time to not only target capacity but also to follow it. That allows us to drive the best economics.
Trends of the near future
Looking ahead, we’ll see the convergence of connectivity and entertainment. That allows new business models. That allows advertising and third-party revenues to come in.
All three of the connectivity business, the entertainment business and the ad business are coming together, and you’re starting to see the blending. You really can’t tell what’s connectivity and what’s entertainment.
Your entertainment follows you with your phone. We’re basically doing that for passengers. We’re allowing the airlines to have a new revenue source by bringing in advertisers who are keen to advertise to the inflight public. Passengers are going to get free internet and free entertainment, and they’re more than willing to exchange that to watch an ad on certain airlines.
Airlines can then use that for loyalty. They can use it for generating revenue from ads. What’s really exciting is what we’re seeing on the ground with YouTube, Netflix and Amazon – they’re all ad-supported now. They all have ad-supported tiers.
We’re seeing that transformation, and we’re going to continue that in the air.
