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Regional Licensing & Availability

Anthony Indaimo – Withers LLP

Head of International CommercialSpecialises in cross-board corporate and commercial law with an

emphasis on technology and media sectors

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Regional Licensing & Availability

• Overview

• Content & Licensing

• Regional Content

• Global Content

• Content Control

• Airlines & Passengers

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Overview

• Economy

• Manufacturers

• Airlines

— Low cost – Jet Blue, Ryanair, Zoom

— Business only – EOS, Silverjet, MAXjet

— International –Emirates, BA, Qantas

— New entrance – AirAsia, Kingfisher

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Overview (Cont…)

• Costs – fuel, Green Tax, etc.

• “Open Skies” pact

• Advances in technology

• Passengers

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Content & Licensing

• Audio/Radio• Movies• TV Programmes• Infomercials• Magazine Programmes• Destination Films

• News • Sport• Games• Gaming • Broadband• Live sports/news

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• Airline expenditure on IFE to increase:

— From US$ 1.86 Billion in 2006

— To US$ 2.44 Billion in 2011*

• In-flight interconnectivity solutions• Good news?

Content & Licensing

* (Source: IMDC Research)

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Content & Licensing

• Rights owner- widest distribution for greatest value• Traditionally rights divided by:

— Territory – domestic, regional or international — Language – original or foreign— Existing distribution – free to air, satellite— New technologies – telephony, broadband

• Exclusive or non-exclusive

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Content & Licensing

• Increase in airlines and technology • Better value and exposure for “premium” content• Separating rights into packages:

– Hand-held devices– In-seat AVOD– Live and Near Live– Advertising

– Pay per view– Gaming– Broadband

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• Low cost domestic US carrier• 36 channels • DTH Free DIRECTV®• Pay TV Fox In-Flight Movies

Regional Content

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Regional Content

• Can jetBlue model work outside US?• Depends on

— Common language— Variety and quality of content— Method of distribution

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Regional Content

• Virgin Blue – Australia— English language— 24 Pay TV Foxtel Channels— Live news/sport

• China, India and Middle East?• Europe?

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Global Content

• Global live TV on board anywhere, at any time• Inmarsat satellites means no ocean gaps• Global content?

– Availability

– Language

– Rights clearance

– Content control

– Piracy

– Price model

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Global Content Vs Regional

• Content mix – route specific vs general

— Regional news for a regional airline?— Passenger mix justifies more global news?

• Language – local vs different languages

— Audio translation?— Multiple language channels?

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• Taste and decency standard • More conservative than TV

• Ideal genres: comedy/romantic/light adventure• Similar standards for advertising

Content Control

—No airline crash scenes—Sensitive to terrorism—No nudity/sex scenes

—Sensitive to violence —No images of other airlines

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Content Control

Examples of:

• No images of other airlines – “BA Airbrushes Branson from in-flight Bond Film”

• Sensitive to terrorism - Virgin cancels “Loose Change” Documentary after complaints

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Content Control (Cont…)

• Film/TV content:— Tape – not time sensitive— Near Live – ability to edit— Live – technical difficulties

• Advertising content:— Near Live – ability to insert/change— Live – difficulty to insert

Some practical issues…

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Content Control (Cont…)

• Liability for Live TV— Disclaimer— Indemnity

• Branding— “Me too” content— Content brand vs airline brand

• Can airline customise its IFE brand?

Some practical issues…

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Airlines & Passengers

• Captive audience

• Demographic profiles

— Higher for passengers than TV markets— Business, premium and first class

• Business Model – combination of— Access fees, — Advertising, — Gaming and merchandising

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Airlines & Passengers (Cont…)

• Potential via Live TV?• Reality

— Viewership assumptions?— Advertising rates?— How is viewership measured?

Advertising Revenue…

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Airlines & Passengers (Cont…)

• Potential for services such as access, pay per view and merchandising?

• Reality— Will passengers spend?— Where is price point?— Useful lessons?

Passenger Revenue…

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Conclusion• Despite advances in technology ….

— Know your passengers

— Select content accordingly

— Be aware of legal pitfalls