Connexion by Boeing: What was the ROI on their Blogging Initiative?

Obviously we were not happy to hear last week about a the end of Connexion by Boeing. We coordinated the Blogging the Stratosphere 1.0 event for them and they sponsor our inFlightHQ blog, and they’ve been a great client. We’ll miss them as people, as clients and as a source of revenue and bragging rights.

Our role as a consultant and partner with Connexion was to help them use the blogosphere to capture a robust market for their remarkable service. But as Boeing Chairman, President and CEO Jim McNerney said, that market did not materialize to the degree that they needed in order to get a return on their massive investment.

In his recently updated and re-release book The World is Flat, Thomas L. Friedman writes that it’s always best to be the “second buyer” of infrastructure and technology. That is, it’s best to be the company that comes in and takes advantage of the infrastructure and innovations that a first, unprofitable company left behind when they ceased operations. We saw it with the massive investment in fiber-optic cable by the telecoms during the first Web bubble and the subsequent direct benefit to globalization. We saw it with Napster, which started the revolution of obtaining music over the Web only to be relegated to relative obscurity by Apple’s better-structured use of their initial concept in its iTunes Store. 

It’s possible that Boeing’s executives looked at the landscape of in-flight WiFi and were concerned that newer technologies might put them at a disadvantage.

The tough reality is that no amount of blogger outreach was going to make the Connexion service any less expensive to run, or eliminate 1.5 billion dollars in development costs. With those sunk costs, I estimate Boeing would need to outfit well over 400 planes a year for ten years to achieve the required ROI. So far only 156 planes had been outfitted to date.

While we could get people interested in the service by creating award-winning buzz. We could provide great editorial that drew in Connexion’s target market. But we couldn’t fix the business model.

So where do we go from here?

We’re going to do our best to smooth the impact of Connexion’s shutdown on its customer base in the U.S. and abroad by using our inFlightHQ blog to keep Connexion customers informed about what the service shutdown means for them. We’ll find out more about what Lufthansa–which has Connexion enabled on 80% of its planes–intends to do with the existing infrastructure. And we’ll look at the future players in this exciting new market.

Long-term, we’ll work to keep Boeing’s initial investment of time, thought leadership and money relevant to the conversation about in-flight WiFi. The Connexion story will be a very important one when we look back on the history of making Internet access available in the sky. We hope that Boeing will look at Connexion’s investment in a blogging initiative as a good one, even if it couldn’t make the service profitable.