JetBlue Airways to Acquire LiveTV, LLC, Provider of Airline's Inflight Satellite TV Entertainment Sy

Jeff G

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[A href=http://biz.yahoo.com/bw/020909/92555_1.html]http://biz.yahoo.com/bw/020909/92555_1.html[/A][BR]
 

runway4

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VERY interesting... now they have complete control over their biggest service advantage, and its distribution to other carriers. I wonder if this will affect F9's launch of their DirecTV service, and if there are any other inflight live TV services in the wings that will ultimately compete with B6. Of course, there's a little money to be made with this, so let's see to what degree B6 tries to sell this service to other carriers.
 
On the conference call, Jetblue acknowleged that Frontier would probably sign their contract before the acquisition closed, and that they'd honor it.

But they did say that future decisions would be based on maximizing Jetblue shareholder value, which means they won't sell it to anyone who might use it against them, as in Delta purchasing for a small subfleet based at JFK to specifically take on Jetblue.

Also mentioned on the call was the fact that LiveTV had never been profitable, and had negative working capital, which is probably more of the reason for this deal than not. Buying them out means that Jetblue won't have to worry about getting equipment for their future deliveries.

Had LiveTV simply gone out of business or sold out to someone else, Jetblue ran the risk of no longer being able to get equipment in the future.
 

MrMarky

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Eric makes some interesting points. This seems like a clever strategy. It not only secures jetBlue's ability to offer DirecTV, but to have a monopoly on it and control its distribution to other carriers.

Though the service is not yet profitable, assuming it becomes the inflight entertainment service of choice going forward, it is conceivable it could become an accumulator of wealth much the same way the majors' CRS systems did.

DirecTV and EchoStar have been trying to consummate a merger for over a year now. DirecTV is currently a unit of Hughes Electronics which is owned by General Motors. GM is trying to spin them off and IIRC, this is part of that effort. Once the merger is completed and DirecTV is folded into EchoStar, I wonder what effect if any that will have. The two systems are not directly compatible with each other.
 

Busdrvr

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[blockquote]
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On 9/10/2002 2:56:04 PM eolesen wrote:

Had LiveTV simply gone out of business or sold out to someone else, Jetblue ran the risk of no longer being able to get equipment in the future.
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[/blockquote]

Next time you see a UAL guppy, look for a little top hat It's a round flat box on top of the fuselage. It was part of the sky Radio system, that is now obsolete since the company providing the service went T-up
 

Busdrvr

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Aug 20, 2002
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[blockquote]
----------------
On 9/10/2002 2:56:04 PM eolesen wrote:

Had LiveTV simply gone out of business or sold out to someone else, Jetblue ran the risk of no longer being able to get equipment in the future.
----------------
[/blockquote]

Next time you see a UAL guppy, look for a little top hat It's a round flat box on top of the fuselage. It was part of the sky Radio system, that is now obsolete since the company providing the service went T-up
 

G4G5

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Aug 21, 2002
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I am not so sure that Live TV has a monopoly. I don't recall ever using them on the Sat TV that we had in the Gulfstreams.

It's more then likely was the case that Eric mentioned. They probably have created all of the switching and hardware for JB. If they had gone under then JB would have had to find someone else and their future deliveries would not be compatable. This helps both companies.
 
[blockquote]
Once the merger is completed and DirecTV is folded into EchoStar, I wonder what effect if any that will have. The two systems are not directly compatible with each other.
[/blockquote]

That should probably read -if- the merger is completed. There's a lot of opposition to it, and rightfully so.

All that said, the fact remains that LiveTV has been shopped to every carrier in the US. Aside from Legend, Jetblue, and now Frontier, everyone has passed on it for one reason or another. So, I don't expect a lot of profit potential, despite the spin that Neeleman has put on it so far.
 

KCFlyer

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[blockquote]
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On 9/11/2002 11:19:08 PM G4G5 wrote:

I am not so sure that Live TV has a monopoly. I don't recall ever using them on the Sat TV that we had in the Gulfstreams.

It more then likely was the case that Eric mentioned. They probably have the created all of the switching and hardware for JB. If they had gone under then JB would have had to find someone else and their future deliveries would not be compatable. This helps both companies.
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[/blockquote]

First off, I'm not so sure an airline should be in the Entertainment business. Just as it has been shown that being in the rental car and hotel business was a mistake. How can this benefit JetBlue? They spend $81 million dollars ($41MM for the company and retiring $40MM of debt). They have a company which THEY were pretty much the only customer, and apparently what they were charging JBLU wasn't enough to cover expenses (as evidenced by the $40 million in debt). Buying the operation is only one thing...they now have to maintain the operation. And by buying them, they have in effect chopped off a good portion of whatever income the company generated.
 

MrMarky

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[P]
[BLOCKQUOTE][BR]----------------[BR]On 9/12/2002 2:41:22 PM KCFlyer wrote:
[P]
[BLOCKQUOTE][STRONG]First off, I'm not so sure an airline should be in the Entertainment business.[/STRONG][/BLOCKQUOTE]
[P][/P]
[P][STRONG][/STRONG] [/P]
[P]Hi KC,[/P]
[P]Well, what have they got to lose? By and large, most of the airlines ain't been doing too spectacularly in the [STRONG][EM]airline [/EM][/STRONG]business. [/P][/BLOCKQUOTE]
9.gif']
 

G4G5

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Aug 21, 2002
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What they are betting on is other airlines installing DTV on their fleets. Then they would be the one stop source.

The problem is I just don't see the major's rushing out to do it in this economy. Business travelers are not going to pay more for it. IMHO you will start to see DTV on the majors once inflight internet service is perfected. Business travelers will pay a premium for the internet not info mercials. The majors are not about to retro fit now then re- retro in a couple of years for the internet.