IFExpress Introduces: SPEAKERS’ CORNER

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Welcome to the inaugural edition of a Hot Topic series we call “Speakers’ Corner“. If the title sounds familiar it’s origin began in the Northeast corner of London’s Hyde Park where open-air public speaking and debate are allowed. While the British version of this democratic podium allows just about anyone to get on his or her soapbox, IFExpress has only asked folks who really know their stuff to share it with our readers. Meet Jonathan Alford, author and editor of the travel blog “Travel Technology and Consumer Experience – Thinking Forward“. Jonathan understands technology (probably because of his day job), the travel experience, and the impact of social media on our business. We were lucky to get him for this kickoff piece. If you are interested contact Mr. Alford directly.

What Delta’s Amazon Deal Signifies For Ancillary Merchandising and Digital Entertainment – by J. Alford

For the first time recently, I experienced the new deal between Delta, Amazon, and Gogo and am encouraged in several ways.

Though I have worked in travel technology, strategy, and finance for many years, I am less familiar with the historical inner workings of IFEC. However, I’m also a consumer and have enjoyed commenting the past couple of years, hoping to identify ways in which airlines, WiFi providers, and other partners can create a better – and more profitable – passenger experience.

In late 2009, mobile technology, fierce competition in digital media and entertainment markets, and airline WiFi installation trends seemed to present opportunity as they converged. At the time, I put forth an approach with a few basic elements:

1) Use mobile technology and digital entertainment to drive ancillary revenue in a departure from the traditional IFE value chain
2) Position passenger markets as a customer acquisition channel for strong consumer digital entertainment brands and to deliver a more compelling experience
3) “Think outside the flight” with mobile and location merchandising to expand revenue opportunity

Now, the Amazon deal makes an interesting story not only in IFEC, but by showing that airlines (and possibly hotels) are recognized as a potentially large customer acquisition battleground in the cutthroat digital media and entertainment industry fight for “living room share.”

This is not just IFEC anymore – and thinking in the context of the broader Digital Media industry could be constructive.

What’s so special?

To start, it’s good to acknowledge Delta and Gogo for adapting to deliver a more compelling passenger experience.

Not to ignore IFE trailblazers like JetBlue and Virgin America and what other airlines are doing, but a marriage of Delta, one of the world’s largest airlines, and Amazon, the world’s largest online retailer and disruptive force in the book and entertainment industries, is noteworthy.

Also noteworthy? Delivering a better passenger experience and driving ancillary revenue are not mutually exclusive.
First, note Amazon’s presence on Delta’s web homepage – positioned as “Your Pre-Flight Destination…for…books, music, and travel essentials”.

Next, note the free Amazon access dominant on the Delta-Gogo home screenshot and Groupon’s placement to target deals based on the destination.

What is being recognized is that airlines offer – at least for a snapshot in time – the holy grail of merchandising. They know exactly when travelers are thinking about what they’re going to do on their flight, where they’re going, and what they have always been high impulse-buy consumers of – books, movies, music, and more.

Think they won’t be tracking retail, Kindle, and other purchases to personalize merchandising to travelers who also use Amazon in everyday life?

What is not yet seen is a dedicated channel for Amazon Video, but I’d imagine we will as in-flight streaming and seat-back technology improves and/or a new revenue sharing model with studios is formed.

For now, Gogo provides video downloads, but in the future, a democratized model rather than “walled garden” is more aligned with today’s expected consumer digital entertainment and commerce model.

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