JetBlue Goes Pay-Per-View

Discount carrier JetBlue (Nasdaq: JBLU  ) is carrying on its innovative ways. Beginning later this year, the airline will offer each flyer a choice of movies from News Corp.'s (NYSE: NWS  ) 20th Century Fox studios on a pay-per-view basis.

The "nominal fee," which will be about $3 per movie, will be collected via an in-seat credit card payment system. Besides feature films, customers can also purchase episodes from the TV series "The Simpsons," as well as various sports and news programming.

But wait, there's more. An agreement with XM Satellite Radio (Nasdaq: XMSR  ) will bring digital radio to the skies for the first time, giving travelers free access to 100 different channels, with artist and song information displayed on the seatback TV sets.

These are far from the first entertainment options JetBlue has offered its customers. Since 2000, live DirecTV programming has been available free at every seat. These unique movie and radio offerings allow the airline to differentiate itself from other low-cost carriers, such as rival Southwest Airlines (NYSE: LUV  ) . And give management extra points for implementing the pay-per-view system: CEO David Neeleman told the Associated Press the $3 fee will be enough for his company to break even on the service.

As Rick Munarriz pointed out last month, JetBlue's successful model is attracting competition like flies. With the likes of Delta (NYSE: DAL  ) and AirTran (NYSE: AAI  ) now offering bargain fares to thrifty travelers, it needs all the help it can get in maintaining margins while keeping fares low.

Talk about JetBlue with other Fools on the JetBlue discussion board.


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