In-flight Wi-Fi has been, to put it frankly, stuck at the boarding gate during the past five years and even when it was cleared to board, it often felt like it never made it to the aircraft cabin.

Telling investors and analysts during the company’s third quarter earnings call on Friday, Global Eagle Entertainment CEO Dave Davis said “more than 200 megabits per second is easily [achievable for our in-flight Wi-Fi],” referring to the company’s agreement with Hughes to utilize the Jupiter HT Aero Modem on its Airconnect antenna system.

“Ku-band systems offer worldwide coverage, satellite redundancy and have the ability to cover 99% plus of all flight routes in the world,” said Davis. “It’s difficult to say that the addition of the modem will take the speed from X to Y, because there are many other variables.”

“We expect the new modems to be available in the months ahead, this isn’t something that’s a year away. And it’s completely plug and play retrofittable with our current modem i.e. same socket and it just plugs in. And we would look to retrofit existing [carriers] based on discussions with those [carriers] and whether they’re interested in doing it or not.”

Global Eagle is one of the world’s largest airline content providers, servicing 150 global airlines and on-boarding 20 new carriers this year, including Copa, Avianca, and Turkish Airlines. It’s also a content provider for all airlines in the Etihad Group, and recently signed advertising and sponsorship agreements with two major U.S. airlines, including in-flight advertising with American Airlines.

“We’re adding resources to our ad sales efforts internationally with a particular focus on European and Middle Eastern carriers, where Etihad and Flydubai are both major advertising sales customers of ours,” said Davis during the call.

“And we’re likely not done with [merger and acquisitions] going forward and we still have strong interest in adjacencies, which maritime is one of them. So the acquisitions we made or definitely have right down the alley was what we’ve been planning and acquisitions that broaden us horizontally are of interest to us as well.”

Skift recently sat down with Davis and Elias Zaccack, SVP and Head of Mobility for SES, to talk about how both companies are expanding their partnership with a multi-year, multi-transponder agreement, doubling Global Eagle’s SES satellite capacity for in-flight Wi-Fi. We discussed what satellites mean for the future of in-flight entertainment and Wi-Fi, content distribution trends they’re noticing with carriers and their thoughts on best practices for monetizing in-flight offerings.

Skift: Where do you see a lot of demand coming from and how does this partnership help with that?

Davis: I really think it’s growing everywhere. In North America, it’s growing from a per-user basis. Users want to do more and more things while they’re in-flight. The growth is really internationally focused as well. As more and more aircraft get installed around the world, and more and more folks want to use the internet around the world, really the demand is global.

We have an agreement with Flydubai to begin offering services there. We have a big customer in Europe. Then, we have a number of yet-to-be-announced partnerships that we think will be coming down the line in different parts of the world. It’s really just global growth.

Latin American and Asian carriers definitely are actively looking at in-flight connectivity. What we’ve seen, the trend, is when one or two airlines in a region become connected, then it becomes a competitive disadvantage if you’re not connected in that region. Then, the S-curve really starts to take off.

You saw that in the U.S. over the last four or five years and I think we’re going to start to see that in Europe now. We have an A320 trial that’s going to commence at Air France soon. Lufthansa has made some announcements. We have a significant major customer in Norwegian. I think you’re going to start to see that acceleration take off in Europe.

I would say, in Asia, adoption has been slow for a variety of reasons. One, it’s just more of a geographical spread. We’re not quite as far up that curve yet, but when one or two or three airlines begin to make some significant commitments to roll out in-flight connectivity, I think you are going to see that take-off and really accelerate quickly, too.

Zaccack: If you look at independent studies already done, you will see that in the U.S., roughly 50% of the aircraft is already connected. In the rest of the world, only 7% are connected. Even in the U.S., those connected aircraft, they started off with relatively low throughput for user-experience levels. Those are now all upgrading.

[SES has] 55 satellites in orbit and three next-generation high throughput satellites under construction. All three of these satellites are scheduled to launch in 2017 with the in-flight entertainment and connectivity market in mind. Our intent was to make sure we enabled service providers to be able to provide a user experience in the air that is no different than what you get at home. We wanted it to be a very simple, robust experience, no different than you turning on a light switch at home and getting that connectivity.

Skift: What does that mean for the future of in-flight entertainment and Wi-Fi?

Davis: What we’re talking about here over the next, let’s say, 24 months is the transition to high throughput satellites. You’ll see orders-of-magnitude increases in bandwidth available to customers that are going to allow them to do pretty much anything they want to do on the aircraft that they do at home today.

As new applications come online and the demand for bandwidth grows in the air just like it does on the ground, we would expect new satellite capabilities to be rolled out in the 2020-plus time frame to provide huge amounts of data to customers to do with whatever they need to do with in the 2020 to 2030 time frame.

We made a couple acquisitions recently, and we are developing the capability to stream aircraft operating information over our connectivity system. Not only is the availability of a lot of bandwidth important for passenger entertainment, but some of these operational data streaming and other things will also be big users of data in the future.

Zaccack: It’s not just people connecting to send an [instant] message or chat or download an email. But now that they’re connected, they’re browsing. They’re doing onboard shopping. They’re doing video streaming. It’s enabling applications, so the flight attendant on board can process orders much faster. That flight attendant can even do some operational data.

There’s talk about ‘Why does the voice recorder have to be in a black box?’ You go looking for it if anything happens. Why can’t you just stream the voice and the video straight off the airplane? You only go look for the voice recorder or the data recorder for the last 10 seconds, or so, of the flight, if something happens, but you know exactly what happened throughout the entire flight.

Imagine, for example, pilots using that huge bandwidth to track real-time flight-path weather data, for example. There’s a lot of stuff that could be used that could be implemented using this additional bandwidth that will improve passenger experience, airline operational experience and safety.

Skift: You just mentioned pilots, and we’re talking about what all this means for passengers. But what about the flight crew and pilots, what are some other ways these satellites and improvements to in-flight connectivity will help them? What about in-flight advertising?

Davis: That is a great point. Crew-related applications are important as well. It’s not only things like having electronic manuals and that kind of stuff but things like being able to report ahead on catering supplies, any damage on board, anything like that that has to be done and being able to have a tool in the flight attendants’ or the flight crews’ hands to be able to report to the ground what’s going on in-flight or what needs to be attended to once the aircraft lands.

It’s interesting you should [bring-up in-flight advertising]. We have a pretty active group here that sells in-flight advertising. You obviously have a captive audience on board the aircraft, and you have the ability to be able to target advertising to select individuals and select portions of the aircraft, or even in select seats. We think the opportunity’s huge.

There needs to be some improvements in data capture and data collection to better understand what ads are shown in-flight. How does that convert into sales on the ground? That data infrastructure is something we’re working on building to make in-flight advertising even more appealing to advertisers.

Definitely, things like sponsorships, where a given sponsor will sponsor live television or sponsor texting or things like that, are definite opportunities and things we’ve taken advantage of to date. You have a relatively affluent audience that you’re targeting for fliers, so it’s attractive to advertisers really around the world.

Zaccack: In certain countries, we’re seeing duty-free shopping being done now online as well. You’re sitting in an airplane, you’re entitled, you’re authorized to do duty-free shopping. The airline no longer has to carry a cart with 500 pounds worth of goodies on it. You could just order it all and have it delivered to your home online. You don’t have to carry liquids from one airport to another and have it thrown in the trash can on the way as you change airports. We’re seeing some airlines actually pushing the limit right now, in terms of what you can do once you have that online connectivity.

Skift: Virtual reality is gradually becoming the new darling of destination and hotel marketers. How are airlines responding and what kind of potential do you see there?

Davis: Yeah. I think the opportunity’s there. We’ve actually had inquiries from some international carriers about that. It’s hard to say how far away it is, but I would think probably in the next two to four years you’ll see some carriers around the world begin to introduce certain aspects of virtual reality into their in-flight entertainment product.

I would say that we have gotten some interest from domestic carriers, but those who have expressed the most interest so far have been some of the big Middle Eastern airlines.

Our biggest business today is offering content. It’s not just content delivered via Wi-Fi, but it’s content delivered manually, stored onboard, shown in seat-back systems and so forth. We really envision a world going forward where we can deliver new pieces of content, libraries of content, to airlines, to maritime customers, cruise ships, and so forth, electronically, across a global satellite network.

Let’s say whatever the latest movies and TV shows, or whatever, are, being able to upload that across the global satellite network and then down to our airline and maritime customers around the world. We see SES playing a key part in that in helping us construct and put together the satellite infrastructure and network to be able to do that.

Skift: Cruises have experimented with O3b satellites because they help bring Wi-Fi to a moving ship in very remote waters. What’s the conversation been like with airlines and O3b?

Zaccack: There are applications where O3b makes sense, and there are applications where high throughput satellites make sense. If you’re looking at delivering 500, 600 megabit, for example, to a ship and follow the ship around the world, like a cruise liner, an O3b beam dedicated to that, or an O3b beam dedicated to an aircraft carrier for the government, for example, is more appropriate. O3b is able to deliver 500 megabit, one gigabit per spot beam. Not all applications require that kind of bandwidth.

Davis: Maybe one way to think about this from a layman’s perspective is with the O3b, and I’m straying into Elias’s turf, so I’ll try to be careful. The O3b satellites operate at a medium-earth orbit, so they actually move, whereas the high throughput satellites are geostationary satellites that stay in one fixed place.

When an airplane is traveling, what happens is our antenna on the top of the airplane keeps itself pointed at that fixed spot in the sky where the satellite is. If you have an airplane moving and the satellite moving, it’s a more complicated pointing problem to be able to keep the thing pointed at the satellite. The O3b applications today, as Elias said, are more fixed-terrestrial or things like cruise ships that aren’t flying at 550 miles an hour.

I think in the future (2020 plus), the high-bandwidth speeds that you’re getting from O3b, we would hope to be able to take advantage of in an aero environment as well, as antenna technology evolves and other things change.

Skift: What do these new satellites mean for long-haul routes between the U.S. and Europe or Asia, for example, and how does this compare with your competitors?

Zaccack: If you take a route like the one you mentioned between Western Europe and the U.S., we have a lot of capacity on that route. The route, for example, between South Africa and South America would have less capacity because there’s less traffic going there. The global network that we have built is designed to accommodate the light-traffic routes as well as the hide-dense routes globally.

We don’t see that route becoming as dense as Western Europe to North America, but there’ll be enough bandwidth to support that route.

Davis: From [Global Eagle’s] standpoint, we think having as a partner someone with a global satellite network and the latest generation of high-throughput satellites about to be launched and being built with launch slots set puts us on par or ahead of any other competitors out there. Not only can we offer the fastest service available, but we can offer services globally. We think we’re at an advantage relative to the competitors that are out there.

Skift: What do you think airlines are doing right to cover the costs of in-flight Wi-Fi, be it asking passengers to cover part of the costs or clever monetization partnerships—like what JetBlue and Virgin America have done? Why haven’t many low-cost carriers adopted in-flight offerings?

Davis: Different carriers have different philosophies about how they want to utilize in-flight Wi-Fi. Some carriers charge for it. Some carriers make it available for free. It’s really an airline-by-airline choice.

If you look domestically, [Global Eagle’s] biggest customer is Southwest, and we think they’ve done a great job at a combination of a paid service but also a sponsored product. If you look at free live television on board Southwest aircraft, that’s a sponsor product. The combination of us and them have worked together to find sponsors for that product. I think they’ve done an exceptional job at getting the mix right between a paid service and a sponsor service.

I think what we are trying to do and what we are building here is a model that is robust enough to work under a variety of different models. Really, what’s right is completely up to the carrier and how they position themselves in the market. You have an airline like Norwegian, which is a rapidly growing European carrier that’s a customer of ours that offers it for free, and they make it a part of their product, free Wi-Fi. That’s right for them.

Others offer a paid service, which is right for them. We’re just trying to position ourselves to service any model that an individual airline chooses to offer.

Zaccack: I’m not convinced Ryanair and EasyJet have not provided in-flight entertainment or connectivity because they’re budget airlines. Europe, in general, has been behind the rest of the world. As I mentioned earlier, only 7% of aircraft in Europe, on average, in fact, some numbers have put it at much less than that, have made any kind of decisions in terms of providing this connectivity and entertainment. Once Europe breaks out, and it will, I think the dynamics will change and airlines will have to compete and will have to provide services. I don’t think it’s limited to Ryanair and EasyJet. I think it’s more Europe in general has not broken out yet.

Photo Credit: From embedded seat back in-flight entertainment screens to our own devices, airlines and airports will want to keep us entertained with creative brand collaborations. GEE