United Air Lines just announced its expansion into the world of digital content distribution with MileagePlus Digital Media Store, where you can exchange your hard-earned miles for renting or buying movies, music, TV shows and more.
Ever since American Airlines introduced the frequent flier award program in early 1980s, miles were usually collected everywhere and then spent on upgrading class of service or free flights. The business expanded from collecting miles on flying in different classes to credit cards and special promotions, all with the purpose of getting a better seat.United's only touch with content distribution until was IFE (In-Flight Entertainment) systems such as the Economy cabin on a Boeing 777-200ER aircraft
The author of this article admits that he spent most of his 900,000 flown miles on numerous upgrades and memorable holidays with girlfriends (how to get a 'free' $20,000 holiday - 160,000 miles for two biz class seats to Thailand, spent Marriott points on a week-long vacation in a Phuket resort). However, with the amount of premium seats being reduced on American carriers, we wondered when these multi-billion dollar programs are going to exploit non-core business opportunities.
Case in point is United Air Lines, a division of United Continental Holdings. United Air Lines was formed in the merger between United and Continental, creating world's largest airline carrier in number of seats available. Company's frequent flier program MileagePlus is widely recognized as world's most valuable FF program, valued at over $7.5 billion (pre-merger, post-merger value is not known, est. $10-11 billion).MileagePlus Digital Media Store is available to all members of United Air Lines loyalty program, MileagePlus (if they are located in the United States).
With the opening of MileagePlus Digital Media Store, United Air Lines is expanding its content purchase from thousands of seats on its 710 mainline planes to tens of thousands of travelers. The concept is very simple - United purchases movies, TV shows and audio files from all major and large number of distributors and wants to change that into becoming a content distributor, increasing its revenue and cutting out the middle man.
The idea behind the program is to keep the rights to all of the purchased digital content and re-sell it to customers for miles they accrued. Given that MileagePlus is world's largest frequent flier program and is tied to dozens of credit cards and various services, it is obvious that United wants that their customers spend their miles other than on revenue-generating seats.
We've checked the digital store and the prices for movies, music albums vary. You can loan a movie for as low as a single commuter flight (for example SAN-LAX, San Diego-Los Angeles), and purchase it for as low as a flight from San Diego to San Francisco. TV shows aren't available yet, but we know that United has a lot of ABC, Disney and NBC content on its flights.
All in all, time will tell how many people will take offer of this service, but with support for Windows, Mac OS, Android, iOS. The best part about the service is the fact that it will download files onto your device, instead of simply streaming them. However, real downside is the availability of the service. For now, you can only use the service if you reside in the United States of America.
Time will tell will United expand the service, or will it just keep it running to unload miles from millions of its members (in 2005, MileagePlus had 42 million members with 11.7 million active fliers). Given their reach, they might even have a chance to become one of Top 5 digital content delivery services.
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