Airlines Swing Into ‘90s With AEI’s Flights of Musical Fancy : Marketing: An Orange-based company has become one of the world’s largest providers of in-flight programming.
After boarding the commercial airliner and buckling the seat belt, you plug in the earphones and sit back for some rest or relaxing reading while listening to a favorite tape--rock, jazz, classical or country.
The entertainment is brought to you through Audio Environments Inc., whose Orange-based AEI Inflight Division has emerged in the past six years as one of the world’s largest providers of airline music programming.
The subsidiary programs music for 21 airlines based in nine countries. The firm’s growth has come at a time when airlines are placing more emphasis on service and other amenities to attract repeat customers.
“Every airline has an image they want to project, and they provide us with information on passenger demographics,” said Marsalee Beaubelle, vice president of AEI Inflight. “We come up with a play list and provide tapes that we think will help them project that image and reach the people they want to reach.”
The airlines’ demand has spurred AEI Inflight’s sales, which company officials said have topped $1 million for the past two years. After several years of losses, the unit made its first profit of $22,800 in 1988, and doubled that to $45,000 last year, company officials said.
Still AEI Inflight is just a small part of the operations of its Seattle-based parent, whose sales exceeded $35 million last year. The company provides music by tape or satellite transmission to more than 60,000 businesses.
AEI is the brainchild of Michael Malone. In 1970, Malone was a securities analyst who tired of the rock ‘n’ roll tapes played at his favorite bar. He thought the tapes were better than the piped-in music then so popular and provided by Muzak Inc.
“This was 1970, and it seemed like ‘1001 Strings plays the Beatles’ was being piped into us everywhere by Muzak,” said Malone.
But the barroom tapes were limited in number--bought by the store owner at a music shop--and posed a legal problem: royalties must be paid to the artists if their music is played in a commercial environment.
Malone set out to fill the gap between Muzak and the bootleg tapes. He obtained licensing and royalty arrangements that would allow him to create tapes of original-artist recordings and offer them to businesses on a subscription basis.
Traveling throughout the West in a Volkswagen bus, Malone soon began selling his idea to chain restaurants and other businesses. The result is that he was able to bring background music into the foreground.
And six years ago, he gave his business wings with AEI Inflight.
The division’s staff of three full-time programmers utilizes a constantly growing collection of more than 4,000 records, tapes and CDs to create a lineup of music for each airline. The programs are updated on the average of every two months.
“We’ve been fortunate to find programmers with diverse backgrounds and eclectic tastes,” Beaubelle said. “Sometimes they even bring in things from their own record collections.”
The baby boom generation between the ages of 30 and 45 represents most airlines’ largest passenger group, so a selection of ‘60s and ‘70s rock is almost always included in the program lineups. Country-Western also ranks among the favorites, followed by jazz and classical.
American music is popular worldwide, but AEI--whose clients include Finland’s Finnair and Ecuador’s Ecuatoriana --takes a multicultural approach for international flights and foreign airlines.
For instance, when airlines flying to the Orient request Japanese music, AEI Inflight turns to free-lance programmer Reiko Kinoshita, a former disc jockey in Japan who now lives in Los Angeles. Kinoshita travels to Tokyo at least every other month, where she keeps up on Japanese pop and enka music.
“Enka is kind of like American country-Western,” said Kinoshita. “The emphasis is on the lyrics and not so much on the tempo. It’s popular with older listeners.”
AEI’s ties to the recording industry have helped its in-flight unit. The company has created special programs with the help of the recording companies. Last year, AEI Inflight prepared a program for Continental Airlines showcasing Motown stars.
“It was great for us,” said Motown’s Karen Sherlock. “Millions of people who wouldn’t ordinarily listen to Motown had our music placed in front of them.”
In return for the chance to expose Continental’s passengers to its music, Motown waived thousands of dollars worth of licensing fees. Typically a major airline pays AEI Inflight $18,000 to $35,000 annually for its programming. The carrier is also responsible for paying artist’s rights and royalties, which can amount to $80,000 to $120,000 a year.
The company is also trying to work with the airlines to accept record company-sponsored programming. “It could save the airlines a lot of money (in royalty fees),” Beaubelle said. “But it must be accomplished through a soft-sell approach. Passengers aren’t going to tolerate having full-blown ads coming at them over the headsets.”
AEI Inflight overcame its position as industry underdog by steadily winning accounts away from its former top U.S. competitor, John Doremus Inc. That firm lost ground after its owner, a pioneer in the industry, became seriously ill. The company disbanded last year.
Subsequently, William Stewart, a former Doremus programmer, formed Los Angeles-based Audio Production Block West, which is now AEI’s closest U.S. competitor. Audio Production only has three airline accounts.
AEI Inflight’s closest competitor in the international market is Inflight Productions Ltd., based in England. Beaubelle estimates that it has about the same number of accounts as AEI.
The growth of the industry has been spurred by the boom in air traffic worldwide. And after the often fatal fare wars and frequent-flyer campaigns of the ‘80s, the surviving airlines are focusing on service and entertainment to attract repeat customers in the ‘90s, industry officials said.
“There are all kinds of changes scheduled at Continental to improve in-flight entertainment, including retrofitting the entire fleet with a multiplex sound system,” said Kathleen Boyd, director of production and program planning for Continental Airlines.
Bob Anderson, supervisor of in-flight marketing programs at TWA, said quality music programming and technology is becoming an absolute competitive necessity for airlines since CDs are becoming standard equipment in many households.
“And music is an important marketing tool,” he said. “If passengers hear something they like or the music helps them relax, they come away with a good feeling about the airline.”
