US Airways has decided to eliminate in-flight movies on domestic flights, realising that they can’t pay studios to show Speed Racer at 30,000 feet when they’re already struggling to meet escalating fuel costs.
Actually, this move makes a lot of sense from the airlines’ perspective. With the widespread availability of DVD players and movie downloads, most passengers interested in watching a film usually provide their own in-flight entertainment, which they know they’ll like.
But from the studios’ perspective, this is another blow. They were making at least $25 million a year in revenue largely from in-flight films, not to mention the additional benefits of being able to expose a captive audience to a film they might not otherwise see but could like and then buy on DVD, see the sequel, etc…
You can hear the nervousness as execs insist the other airlines won’t follow suit, but look what happened with charging for checked luggage:
THR: The Hollywood studios will take a revenue hit when US Airways does away with in-flight movies, but execs don’t expect other airlines to follow suit.
Nontheatrical distribution contributes $25 million or more per studio in annual revenue and more than $300 million among all media companies, with film and TV sales to airlines accounting for about 80% of that total. Other sources of nontheatrical sales include the hospitality and institutional markets.
US Airways said Tuesday it would stop offering in-flight movies on domestic flights this fall to cut expenses, citing pressure from rising fuel costs. Although airlines are often prone to copycat moves on pricing and customer services, Hollywood execs in regular contact with airline officials said Wednesday they don’t believe other carriers will follow US Airways’ lead this time.
“I don’t expect that the major national airlines will follow suit,” said Julian Levin, Fox’s exec vp in charge of nontheatrical sales. “I think they will continue to offer entertainment to their passengers, even in the extremely difficult environment of rising fuel costs.”
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