http://arstechnica.com/tech-policy/2013/06/stow-it-no-more-f...
If this happens, then SkyMall's market just disintegrated like a wet telephone book -- they're competing with Amazon et al from boarding to arrival at the destination gate. Even without in-flight wifi, travelers who forgot to pack a book or magazine are no longer going to be a captive audience, so that 70% eyeball share will crash.
The product that skymall is selling is entertainment.
The value of being able to leaf through a magazine and see some interesting products. And maybe buy something you would never think of.
Just like HN is a venue to read things you might not come across in your own browsing. Skymall pushes product into easy viewing site because they are a printed magazine right at your fingertips.
Now of course you can do that online but you are in a confined space and a captive audience and that magazine has appeal plain and simple no matter what you can take a look at online. And of course you have plenty of entertainment on your tablet or laptop. But this is in a different format and it deserves at least a look.
Let me make up an outlandish example.
You have hotel wifi and a tablet in your private hotel room.
You then spot a magazine of pornographic pictures in a drawer and that type of stuff turns you on (as it does most men, right?). Even if you can view the porn online you are still going to leaf through the magazine because it's easy to do and just "take a look" for the entertainment value. (That's quite different from actually buying the same magazine in the store in the hotel).
Their advantage over amazon may be the entertainment value, but it seems improper to say they're "selling entertainment" when realistically they're selling ads. I don't see the connection to porno magazines since they're completely different business models.
SkyMall has four main assets, in two classes:
1. deals with airlines to put their magazine in the plane seat pockets (stable), and with companies to advertise in their magazine (ephemeral); and
2. cultural expertise in dealing with airlines (rare), and with selling advertising in a magazine (commonplace).†
Even though advertising is, of the two, the revenue-generating asset, the other one is a monopoly (it's an exclusive contract with a lot of venues, sort of like Ticketmaster.) So, if advertising stops working out for them, and they're going to pivot, I would imagine they'd keep the monopoly--their magazine getting put in seats--and try to find a new revenue-generating content-stream to fill that magazine with. Deciding to instead keeping the advertisers, and the advertising "business", and trying to find a new way to use them, sounds kind of braindead.
...in fact, if I were them, and I was pivoting, I'd sell off the advertising "aspect" of the business to a company that wanted some built-up advertiser relationships... hmm.
Here's some speculation: Xhibit bought SkyMall on a PE trading system, right? If Xhibit is internally thinking of itself as a PE firm in this action--and if SkyMall was frank with them about their worries that their advertising revenue-stream will go kaput--then Xhibit might be trying to split SkyMall: to absorb the advertising part of the company into itself (where they can use the advertiser relationships in digital-media industries), pivot the magazine into something else, make it profitable doing that something else, and then sell off the magazine, like any other PE firm.
This also, sort of, explains why Xhibit has so many nascent ventures; what could be going on is that, since they're absorbing SkyMall's advertiser base, they're just asking those advertisers what extra services (beyond just magazine ads) they would pay for--and then setting out to build them.
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† (Also, expertise in the logistics of getting a magazine printed and into the hands of airlines, but that's not much relevant either way.)
A secondary issue: most people don't look at the ads in magazines for entertainment unless there's no other entertainment option available. SkyMall had the privileged position of being the only eyeball candy to hand for millions of flyers who weren't allowed to use their laptops or tablets or phones at certain times, and who hadn't thought to buy an emergency magazine or paper book. (Full disclosure: I'm often one of them.) I suspect games or ebooks or emagazines will prove vastly more attractive than a SkyMall catalog, so what's going to drop is the number of eyeballs on pages, which will eventually bite into the first-time-buyer stats for the advertisers, with indirect knock-on effects on the SkyMall business as a whole.
The advertiser-relationship side of the business is indeed likely to stay viable, and Xhibit has bought a buttload of goodwill business, but the magazine is almost certainly going to become non-viable as soon as iPads are legal during take-off and landing and especially if a price war breaks out between airlines over in-flight wifi.
You might argue that the SkyMall people could sell their stock now. But if Xhibit is as much of s sham as the authors say, then it's going to be hard or impossible to cash out at a good price. Once you start selling the shares of an artificially inflated company, the price falls fast. You might unload a few at a high price, but just a few.
Plus you'd still read Skymall during takeoff/landing where electronic devices are banned.
Sure, from the looks of today it might not seem like a big disruption for SkyMall but it will.
On most flights I go on I'd say about 10-20% of the folks have a tablet device. That trend will also go up and continue to decrease the effectiveness of SkyMall.
I can't site a research paper to back this up though.
Instead of doing that, maybe they could have hired technical staff and built a mobile app themselves?
I know it's possible because the last flight I was on did it for Ebay. You could surf Ebay for free without having to pay for Wifi.
I wouldn't be on this approach working for SkyMall though.
The cost is closer to $12-15 for a long haul and as little as $5-7 for a mobile device or shorthaul or with a coupon pack.
> Internet access will be available for $8 all day, per device and will be displayed once you launch your internet browser and connect above 10,000 feet*.
This trend will continue and expand.