We ‘re pleased to provide a transcript of our #PaxEx Podcast interview with Bluebox CEO Kevin Clark, the audio recording of which can be accessed here.
Intro music.
Mary Kirby: Welcome to the #PaxEx Podcast, which tracks the evolution of the airline passenger experience and aviation’s sustainability initiatives.
We’re pleased to share our interview with Kevin Clark, the CEO of Bluebox, which is known for bringing engaging inflight digital experiences to passengers. The interview was recorded at the superb APEX TECH conference in Los Angeles, where attendees got the chance to take a deep dive into some of the most timely topics coloring the passenger experience.
Mary Kirby: Bluebox has been around for a while and you guys are perhaps best known for your portable inflight entertainment systems, whether they are aircraft powered or battery powered. But for those listeners who don’t know much about your company, tell us baseline where your focus is at.
Kevin Clark: So first to start in terms of our age, this is our 21st year in business. 2004 in May was when we were founded. The business focused on the portable space in the inflight environment. And we are very much in the inflight environment. So we’re not, you know, in the booking path or in the post-booking path. It’s in the inflight experience and we and we focused on inflight entertainment. That’s where our heritage is. But we’ve developed that from just being inflight entertainment to the other things that you can do in the air, if you have a digital environment. So if you imagine that the box, which we are known for, and and the name of the business came before the box, it’s kind of an interesting back to front. But the the box actually creates an environment where we can spin up all sorts of applications. So our application environment is called Blueview and that does deliver inflight entertainment to passengers own devices. It can be streamed to passengers’ own devices, but we use the same digital environment and the Blueview software to deliver other capabilities such as retail inflight for order-to-seat and presentation of advertising. So we’re really in the environment, in the cabin environment delivering digital capabilities to passengers.
Mary Kirby: Very good. I recall during the COVID pandemic, in fact, that a lot of innovation happened with your company. It appeared at that point, of course, airlines were looking at more of a touchless experience. But it does feel as if at around that time you started bolstering the kind of e-commerce side of your business proposition. Is that accurate?
Clark: Yeah, that’s absolutely it. And I guess, similar to many other vendors at the time, airlines were very focused on survival, as indeed were businesses such as ourselves, right. But it did give the advantage, if I can say this in a delicate sort of way, it gave the advantage of being able to take time to do things without absolute raw customer demand to hav eto deliver things. So I think every vendor that, once it got itself sorted out into how it’s going to best ride what it thought was going to be the impact of COVID, could then turn its attention to developing capabilities that, you know, we really need to give some breathing space and time to develop those. So that’s exactly what we did. So we had for quite some time the idea that we could deliver retail e-commerce capabilities in the cabin. And this gave us a space to do that… There’s a little bit of confluence of factors here. Some of that was, was helped by the imperatives around COVID. So the the desire for a zero touch or or limited touch did mean that well, actually the idea that you could order something to your seat and have it delivered had more impetus than perhaps just, you know, even in a non-COVID world, is there a demand for order to seat. Well, there is. And it’s also light touch from a physical point of view. So those things came together and gave us a pretty strong impetus to get on with developing.
Mary Kirby: Very good. More recently, of course, you announced a really interesting partnership with the fflya group where you would use the Low Earth Orbit satellite constellation of Iridium, the Iridium Certus service to ultimately have a sort of light connected box. Where is development with that?
Clark: So we’ve got to the stage of testing it and proving that it works. And the principal driver for that is, because as you say it is a very light bandwidth capability. And if that’s the case, then what you have to do is focus on, well, what are you going to do with that bandwidth rather than let’s make it available and see what happens, which you can more readily do with high bandwidth. So the focus in that case was really on credit card authorization. So we’ve been able to do that and we’ve been able to prove that it works on the ground. We haven’t done it in the in the air yet. And one of the reasons we haven’t done it in the air yet is again, the same as many in the industry are facing. The technology is moving so fast. Having proven the principle, it’s still a step for someone to say, ‘well, we’re going to put this capability on our aircraft and use it just for fraud prevention.’ Because the art of the possible starts to open up. Once you think about, you know, what you can do with low bandwidth connectivity, then you start to think, well, there’s other things we can do and that pushes the case up for a little bit more bandwidth and requirement capability.
Mary Kirby: I gotcha. Very, very interesting. And of course you have the technology right now that is able to authenticate cards effectively without that real-time connection, correct, Where you have a pretty solid understanding of the cards that are actually going to go through,
Clark: They’re going to go through.
Mary Kirby: Explain that to me. Yeah, that’s the offline authentication.
Clark: Yeah, and I mean, there are layers to this, depending how far you wish to go. But, the starting point is that most all credit cards have a have that long digit, that long number on the front and that that number isn’t a random number. It is a number that has to, if you put it through an algorithm at the other end of that, the system will be able to tell you whether that’s a valid credit card number. So it’s a lot of redundancy in those numbers. It’s a redundancy check, a lot of redundancy in those numbers. So we can run in an entirely offline environment without even necessarily a card present, but the number of the card there, we can run a check to say, ‘well, this is, this is a valid card number.’ So you can make assumptions and based on the airline’s willingness to accept a degree of fraud risk, because there is a degree of fraud risk, you can say decide on the basis of the services you’re offering, it’s okay to accept that as a card. So for example, we if if you were buying access to inflight entertainment system, now the risk, the risk and the cost of someone using a card that either is passed its limit or or doesn’t actually physically exist is that they could potentially consume or watch content that they don’t actually ultimately pay for. But the risk in that is, the loss is actually low. Now that’s a little bit different from if they were buying something off a galley cart,
Mary Kirby: Like food and beverage?
Clark: Like food and beverage, in which case the you could still take that risk, but the fraud risk or the impact of that fraud risk is a little bit higher. So that’s where you’ll typically see in the inflight catering side, there’s there’s generally a handheld device where the card has to be present. So you tap the card. Now that card could still be bust on its limits. It could be overspent, right? But at least you know the card is valid and the card is real. And what you can do from an airline point of view, or indeed any organization that was using that, that still could be offline. There’s no connectivity. But what you can do is you can then, if the card fails in the transaction, you can automatically re-present that card or re-present the credentials of that card for payment at some period, you know, soon afterwards, say seven days or 14 days, by which point the card that may have been at its credit limit could actually have been paid down. So it’s got credit again. So there’s strategies that allow you to deal with that.
Mary Kirby: Very good. Also noteworthy, and this was, I want to say, about three years ago or four years ago that Airbus brought your software in as a linefit offerable product to airlines, along with a couple other companies in the space. Talk to me about that program and what that means to your airline customers in terms of having a consistency both for new aircraft delivered with your software and then being able to retrofit or obviously bring the portable.
Clark: So one of the one of the the great benefits of the portable system is it will sit on any aircraft. And it can be taken on the aircraft without, you know, large regulatory requirements. But we’ve always had the desire. And in fact, we started in the wireless world, in the fitted wireless world, if you go back to, you know, 2014 or 2015, we started as many did on the back of Kontron kit. And we spun up our software on there. It’s broadly the same software that sits on the box.
Mary Kirby: Is the box still the same, though?
Clark: The box looks the same, but it’s now at generation four of the box. So the box has moved along very dramatically. So it’s more powerful.
Mary Kirby: But still Kontron?
Clark: Oh, sorry, no, the box is our own box. This is an in-house box. So our portable box is entirely in-house. But we spun up and when we started, we spun up on the Kontron fitted hardware that, because that was kind of, the flavor of the month if you were looking to fit stuff. So we have those capabilities. Now, Airbus, I think are going through very interesting changes and you’ll know some of them very well. But a number of years ago, Airbus decided actually one of the ways to bring choice to our passengers was to put the physical capability on the aircraft and allow airlines to select what software system they wish to run in the inflight entertainment. So we’ve had a relationship with Airbus for a long time, going back well before this actual relationship. But what we did with Airbus is, when they announced what’s called the open software platform programme, we said, well, we’ll participate in that and we can bring our skills to that and we helped guide some of the shape of that programme, as did some other vendors who are involved in that. And what Airbus basically did was they took that to the market and, when you’re ordering a new aircraft, you have the option to select, it’s kind of like on the options list, you have the option to select the open software platform. So we signed up for that, formerly a part of it. Today we have three customers flying on that. We’re about to announce a fourth a bit later on this year. We’re the first to market flying with it. And we’re the most deployed on that. So and it’s great for us and it’s great for airlines. And, if you take an example, it would be Jetstar in Australia. So Jetstar in Australia had a whole raft of new A321neos coming in which they’re up at about 20 or 22 or thereabouts of those aircraft coming in through the Qantas Group and then going to Jetstar. But they also have a whole range of you know, classic engine option aircraft, but they wanted to deliver a consistent experience for passengers across those fleets. So what we put in place for for Jetstar is for the aircraft that are classic engine option, they have our box, the portable box on those aircraft and they’re actually wired into the aircraft to take power from the aircraft. So they’re not the battery-powered.
Mary Kirby: And does that require any kind of supplemental type certificate?
Clark: In that particular case, yes, it does. I mean it can be a minor modification. In CASA’s (the civil aviation safety authority’s) case, because it is Australia, it’s actually an STC. So that requires an STC. So those aircraft have that system. the new aircraft that have come in from from Airbus, the neo aircraft A321neos have the provisions and they have a server and they have the wireless access points already built in the aircraft at the point where those aircraft are delivered to Jetstar, so they take the ownership, the transfer of title, we then spin the software up or their engineers spin the software up. It’s exactly the same software on those boxes as it is on that infrastructure, as it is on our portable boxes.
Mary Kirby: Wow.
Clark: Which means from a passenger point of view, most passengers generally, unlike us, we would know exactly what the aircraft were on, but most passengers wouldn’t know what aircraft are on. But they have exactly the same experience. It’s the same software system. It has the same capabilities. You can move between aircraft and it’s, you know, it’s the same experience, and that’s proven to be a very powerful sales proposition. And from an airline point of view, it can deploy things. So you know it could deploy, for example, advertising across the fleet. Doesn’t matter whether it’s a neo or a classic engine option, it’s the same system that’s delivered that
Mary Kirby: Very good. Obviously the content then is streamed to passengers’ own devices.
Clark: Yes, it is.
Mary Kirby: But do you ever see a potential for moving towards a seatback? What’s interesting is Airbus showcased your product on stand in a seatback, at Aircraft Interiors Expo.
Clark: Fromm a technology point of view, yes, that’s very possible. And I mean, if you go back in it, we’ve done many things in our history, 21 years, right. You can get up to all sorts of trouble.
Mary Kirby: I remember I remember iPads even at one point.
Clark: We still do then. We still do iPads actually. But yes, we had a vision in the early days that actually where the industry might go is it would just be devices in the backs of seats which are powered and you could stream to them. And that’s still out there and still a possibility. And the capabilities and the infrastructure here that we deliver and others deliver does support that. The trick is to get, you know, those screens in the back of seats because that’s a bit of, you know, is it seat manufacturer drive to do that, is a major vendor drive to do that, because those those devices in the backs of seats then have to go through quite different types of of checks. They’ve obviously got the head impact checks and other such things that you would have that we wouldn’t see if you were using your passengers’ own devices. So to answer your question, yes, it’s possible and certainly it could be delivered.
Mary Kirby: OK, very good. We are at here in Los Angeles at the APEX TECH conference. I find this conference to be so valuable. I love the format and I love kind of, you know, the deep dive that we’re able to do on some of these topics. When you come to this show, particularly, what are you on the lookout for?
Clark: Several things actually. I mean, the first thing is we’re always thinking about where’s the market going and how do we evolve our products or indeed even create new products that are relevant for where that market is going. So one of the principal advantages is that we have the chance to be part of the discussions on where can technology take the industry? How can the technology that’s available or could be available enable the industry. So one of the great things for us of participating here and this is different from the APEX EXPO event, which largely about meeting potential customers. Of course there are airlines here and we do talk to airlines, but there’s lots of vendors here as well. And the general thrust is about talking about the things that are changing in the industry and what it might mean. So our principal role here is to be part of that discussion and help shape it, hear what’s going on, determine [if] there other things that we should be doing and also to some extent validating where we think the future is going and maybe resetting that a little bit if we think we’ve got it a little bit wrong. So certainly for us, it’s about, I would say this is very much a give and take conference… So although I generally do most of the events for this conference, we have our CTO, who you may know a chap called James Macrae. So he comes to this as well. And aside from being a good chunk of time out the office to give some brain space to thinking about technical things, it gives us a chance to again, talk about the technical things that we think might be affecting us or that we can bring to the market that might affect where the market goes.
Mary Kirby: Anything discussed then in the last day or so that you’re able to discuss in terms of what might color your vision going forward?
Clark: Well, I think yeah, it’s, it’s an interesting question
Mary Kirby: Without like asking you on proprietary, but…
Clark: So what I can share is, I mean, we’ve always had a view that the disconnected world …will be around for quite some time. And we get very focused on, you know — and everyone quotes —the Valor Consulting report. That’s up to, you know, 50% [connected aircraft] by 2030. But of course, the flip side to that is, well, there’s 50% of aircraft that not connected, right? And there will be a large proportion still not connected. So that market is still very relevant for us. However, we’re looking ahead and saying, ‘yeah, but the connected market is very relevant for what we do as well. So we’re looking at the capabilities that we deliver currently in the cabin and how might those be delivered differently perhaps or with extended capabilities in a connected cabin. And that has impacts for, well, I mean, crudely, it has impacts on what sort of products, or how do we shape our products, but also throws to us and others challenges or thoughts on well, ‘Okay, but how do you architect products to live in that world?’ And, and you know, not just extra capabilities, but other capabilities that are becoming available that we see actually allow us to do maybe the same things, but in a different way and a more effective way and more efficiently. So yeah, those are the things that are really interesting. In the last day or so, that’s been quite a large part of the conversation here. You know, what’s IFC and where’s IFC going? And we’re looking at…does this help validate some of the thoughts we’ve got and some of the technical work we’ve got going on? Does it help steer it? So it’s useful for those things.
Mary Kirby: That’s interesting. So you would see your addressable market as both the large disconnected fleet that perhaps doesn’t get enough attention, but also potentially the connected fleet and where you may play.
Clark: So, if you ever sat in a board meeting… if you sat in a board meeting, what I say to the board is because it is a concern if people are close to the industry but not close enough to understand some of what’s happening, they could see that as a threat. But I say actually, if you think about it, if you take the 50% point and you say, well, we are in the world of the, let’s say the traditionally disconnected market, that’s 50% of the overall market. Actually we’re in the whole market now. So that there’s another 50% of that market or emerging 50% that’s never addressable for us. So our market has just gotten bigger and we can very easily be relevant in both of those markets. So, you know, everything leads to to to a purpose or an end point. But, but some of the work that we’ve been doing has been on the basis of, you know, at some point we will be able to make use of connectivity to access some of those things. And it’s part of the driver — and you’re probably well aware of of Viasat and its program, the connected partner program — it’s part of the reason we’re a part of that program and we see the relevance of it is because that gets us plugged very much into the the high bandwidth connected environment.
Mary Kirby: Very, very good. Accessibility of course has been a priority for you guys has several years. And in fact if memory serves, you were perhaps the 1st out there to raise that flag on a more accessible solution. And we had a great panel yesterday evening with the accessibility workshop participants. In terms of where that all stands, however, it does appear like the regulatory side may be taking a little bit of a, how do I say it, it’s not moving as quickly.
Clark: Easing a bit.
Mary Kirby: It’s not, yeah, it’s not moving as quickly as some stakeholders would like, obviously as the disability community would like. But you’re armed and ready.
Clark: Yes, we are. And, you’ll recall the on our iPad product, as you say, we were first to the market with that. And we did it very seriously. We did a lot of work with Virgin Atlantic Airways and it was a great, great boost to the industry and what it also allowed us to do, it allowed us to learn about the importance of some of the capabilities in accessibility. And sometimes you can sit, in the absence of a real driver and think you know what you know. And then you realize, when you actually get into the market, actually there’s lots of things you didn’t know, you didn’t know. And we learned from that. And you know, one of the great things of working on portable devices and tablet devices is many of the devices have lots of very powerful accessibility capabilities in them anyway. And that market continues to develop. The key for us and other vendors is to make sure that we can make use of those. We don’t lock those capabilities out or make them inaccessible. So we do that. We’ve always got an eye to that. One of the things that I think is perhaps a reason for, you know, maybe an easing in kind of the regulatory environment is the technology. You know, technology moves so quickly that quite often the eye can get drawn or the attention can get drawn to the things that appear much more interesting or they’re moving faster or indeed maybe even it’s imperative that you have to look at those things because otherwise, you know, the market moves ahead of you too far. And I think that’s a little bit of what’s going on at the moment. And certainly with the connectivity drive, there’s a lot of attention going into connectivity and what it means for the market. And that’s drawing a bit of the attention away from accessibility.
Mary Kirby: I’m a little guilty of that too.
Clark: Well, we all have a little magpie of it, as it sparkles.
Mary Kirby: Yeah, it is moving so quickly. It’s kind of almost hard to keep up. But anything else you’d like to highlight or underscore about Bluebox‘s work here going forward?
Clark: Yeah, so as a business, we’ve got quite a lot of work going on on product capabilities that we will be announcing. We’ve got some customers where we haven’t announced yet, but we’re announcing later this year and hopefully early next year. And then some of that will underline the value of the relationships that we’ve built up. We are, as a business and I think other businesses may well be the same, but as a business we took a view a little while ago that, you know, we can’t boil the ocean. We can’t do everything. You kind of start off thinking you’re going to be the, the game, the changer of the environment. We’re not going to do that. We recognize we’ve got to do it through partnership and relationships. And so, that’s why, for example, in the business, we have a team whose sole focus is on partnerships, relationships and managing those relationships. It’s not just about establishing, it’s about managing them and making sure that they work effectively. So that team, for example, work very closely with Airbus. We look at the the roadmap for Airbus that allows us with Airbus and others to get into the discussions about where they’re taking their technology and how we can help, assist some of that. And that’s an important part of our DNA. But if you went back ten years, as I say, we’ve done many things in our journey. If you go back ten years, we were very much more about just doing our thing and bringing it to the market. Now it’s much more about, we’re part of a very complicated ecosystem. How can we make sure we benefit from that, but we also bring benefit to it from our contributions.
