Video Age International June/July 2016

22 June/July 2016 V I D E O A G E not only on their home country, but also the major markets they serve. A couple of our clients take up to eight languages per film. With the vital importance of the international box office, studios are providing more languages more quickly than ever.” The next big evolution in IFE is Wi-Fi, which lets passengers bring their own video devices (BYODs), saving costs (lighter equipment and less maintenance) and possibly increasing revenues (shopping and gambling) for airlines. Even though seatback video devices allow on- board purchase of food and drinks, traditional IFE systems can cost up to $6 million per aircraft and equipment that weighs 300 kg. can add $50,000 per plane a year in fuel costs (also adding electrical power draw). Travel website Tnooz calculated that an airline can save up to $24 million for a 200-seat aircraft when the traditional on-board IFE is replaced with BYOD. Some airline analysts are now saying that the old embedded IFE system is a thing of the past and that only connectivity-type models will remain, including virtual reality headsets that offer cinema- style 2D and 3D movies. But inflight connectivity is a shared pipe and high-quality video experiences are limited by today’s bandwidth. However, technology is coming to the rescue with faster Wi-Fi systems, such as Exede, which of connectivity and can stream content while in- flight without being connected to the Web. Recently, GEE also introduced ENTICE (Entertainment, Information, Communication and E-Commerce) a platform for wireless IFE, offering up to 10,000 hours of content. NewYork-based Euroconsult reported that total revenues to airlines from passenger connectivity services are expected to grow from $700 million in 2015 to about $5.4 billion by 2025. At the end of 2015, 72 airlines had installed or planned to install passenger connectivity systems on-board. The number of connected commercial aircraft is expected to grow from 5,300 to 23,000 over the 2015-2025 period, accounting for 62 percent of the global fleet. For sure, in-flight BYODwill change the current IFE system into an in-flight connectivity (IFC) model. According to Frost & Sullivan, the content sector (comprising CSPs) is going to consolidate into “two or three players that will be driving the market.” In addition, vertical integration will continue with hardware suppliers becoming content integrators. But contends Spafax’s Chacko, “ In our 30-year history, we have seen both consolidation and fragmentation of our business. Through all that, we have been able to remain a leading CSP.” ( By Dom Serafini ) uses ViaSat satellite technology and offers speeds eight times faster than other systems (reaching up to 12 Mbps) and four times the number of passengers connected simultaneously (basically every passenger on the flight), compared to older models that use air-to-ground: a broadband network of cell towers on the ground. Taking advantage of ViaSat technology, last fall, air carrier Virgin America teamed with Netflix to provide complimentary in-flight Wi- Fi access to stream Netflix content to passengers who subscribed to the VoD service. Similarly, through ViaSat, JetBlue is offering free high-speed Wi-Fi in-flight services at the cost of a “coke and a bag of peanuts” to the airline. However, GEE’s Griffiths doesn’t see Netflix as an IFE threat, since the airline window is the first window after theatrical releases, while Netflix’s SVoDwindow is third in line after TVoD and pay-TV. “ Improved connectivity changes the nature of IFE,” acknowledged Spafax’s Chacko, “but offers us a new challenge to find unique ways to engage with passengers. It opens up a world of IFE opportunities which allows us to help our clients engage their passengers in real-time — a concept we call ‘in-journey, in-play.’” Competing with Exede are GEE’s Raw 44, On Air, Live TV and BAE’s IntelliCabin. On the other hand, Gogo Vision and GEE’s WISE use wireless IFE systems that operate completely independent IFE Business For CSPs (Continued from Page 20) TV Biz in Hungary, Poland (Continued from Page 18) Council. The assets of these outlets have been transferred to a newly established public media fund, which is managed by the Media Council. News content for all public media stations is produced centrally by Hungary’s national news service, MTI, which is headed by a director nominated by the Media Council chairperson. Opponents claim the measures have eliminated the independence of Hungary’s public service media, bringing all aspects—from programming to funding to regulatory supervision—under the Media Council’s control. Hungary’s Media Authority has a range of powers over all aspects of media regulation. Critics have challenged the Media Council’s role in tendering and awarding broadcasting licenses in particular, including its powers to award licenses without a tender, as well as the Media Authority president’s power to issue ministerial-level decrees regarding licensing and spectrum fees. Ina relatively smallmediamarket a large portion of the available advertising revenue is made up of publicly-owned companies, such as the Hungarian National Bank, the postal service and the national lottery. Under Orbán, the bulk of these contracts have been directed to channels and publications seen as supportive of the government. Budapest’s Mertek Media Monitor reported, “Market competition among media agencies is clearly distorted by the biased award of state contracts.” According to Mertek, commercially funded TV networks, newspapers, magazines, radio stations and websites can’t afford to risk alienating advertisers and suffering a loss in funding, which has resulted in self-censorship by many newsrooms. Gábor Polyák, aHungarianmedia lawyer, argues that Hungary’s Media Council could tame media entities by imposing heavy fines. For broadcasters fines can be up to 250 million forints (U.S.$ 900,000), on vague content-related charges. “They haven’t abused their power, but charging content violations is not the method commonly used,” he said, “Instead the government distort and reshape the advertising market in which state companies play an important role.” Atmedia, a privately-owned ad sales agency based in Budapest and operating in the Czech Republic, Poland and Hungary, now sells all Hungary’s state media advertising — including state-owned TV networks Duna, M1, M2, M3 and M4 — and TV2, the country’s second-largest commercial TV network. Recently, TV2 was purchased by Magyar Broadcasting Co., which is owned by Hungarian- born Hollywood producer Andrew Vajna, who was appointed by the Hungarian government as the head of its National Film Commission. Beefing up TV2’s finances also had to do with the government’s initial intention to weaken RTL Klub, the market leader. In order to weaken its finances, in 2014 RTL Klub was levied an incremental revenue tax, however, after RTL filed a complaint with the European Commission, the levy was changed into a flat tax, which ultimately will benefit RTL, but not smaller players. Another key consideration for selective allocation of state advertising funds is rooted in a recent showdown between Prime Minister Viktor Orbán and Hungarian media tycoon Lajos Simicska. Since Orbán felt that the businessman’s economic power would interfere with his own power, state companies’ ad spending in Simicska’s media outlets was drastically cut and redirected to the governing pro-Fidesz entities. As for financing production, only three players in the Hungarian television arena have the financial strength for their own production facilities: RTL, TV2 and MTVA. This latter entity is the production unit of Duna Médiaszolgáltató Zrt., the statemedia group that also owns six TV networks. Finally, a potential cooperation between the Polish and Hungarian television market might be realized in the form of a joint “V4 Channel” as proposed by Jacek Kurski, a former Polish Law and Justiceministerwho calledupon theVisegrád countries (Poland, Czech Republic, Hungary and Slovakia) to promote shared values. ( Ethan J. Baxter contributed to the story from Budapest )