Norbert Muller, head of Program Management for Lufthansa System's BoardConnect, says carriers in Europe and Asia have for years equipped both their short- and long-haul aircraft with in-flight entertainment options. But now he's seeing more U.S. carriers seeking to offer entertainment even on short flights.
"We are seeing demand from airlines to offer something like that to differentiate themselves from their competitors," he said.
Handing out tablets or offering streaming on personal devices is cheaper for airlines. Using iPads might cost about $600 each, vs. the thousands of dollars a seat-back screen would cost.
"They can distribute these with relatively minimal disruption," Planey said. "It's a low-cost, low-investment, no-installation option."
The strategy is also appealing because personal devices are not as heavy as hundreds of seat-back systems. And a lighter plane translates into financial savings.
Rob Fyfe, CEO of Air New Zealand, says that for every 2 pounds of weight on a 12-hour flight from Auckland to Los Angeles, the plane burns about half a liter of fuel. So for every 2 pounds of weight removed from a wide-body aircraft on long-haul routes, the airline saves $400 per year.
"There is an enormous economic incentive to reduce the weight of the systems," he said.
Air New Zealand has not resorted to handing out tablets. Instead, the airline recently signed on with Panasonic Avionics to try its new eXLite system, a seat-back screen that weighs just 3.2 pounds, less than half the usual weight.
Some airline executives say they would never give up on seat-back screens. Handing out tablets, said Brannelly, seems like a shortcut.
"Whether they are innovations or stopgaps is the big question," he says of the strategy. "There's nothing better than a TV already fixed there for you. Having to set up a tablet on your meal tray is not that convenient. I don't think you want to go from the embedded experience to that experience. I don't think that will ever compete." (Read more: A Cool Airline Tray Table You Wish You'd Invented)
And Kirby points out, the airline-owned tablets come with their own baggage. "There are headaches for the crew involved," she says. "They all have to be charged ... and updated with content."
Flight attendants also have to make sure passengers are abiding by Federal Aviation Administration restrictions on the use of electronic devices in-flight. Cameron King, an American Airlines spokesman, says flight attendants distribute the devices once they reach the altitude at which it is safe to turn them on and collect them before devices have to be turned off for landing.
Letting passengers stream content onto their own devices also has one major drawback. Hollywood studios are reluctant to let airlines give out pre-DVD movies for people to stream on devices they can take home with them. "It's such a revenue generator for them, and they're not ready to let it go," Kirby says.
Looking for Loyalty
Whichever strategy an airline chooses, chances are it is not making much money from it, experts say.
"I don't think airlines view (it) as a way to make money, but more as a way to build loyalty to the brand," Deloitte's Weissenberg said.
Most airlines don't charge for in-flight entertainment on long flights. And it's too early to tell how many fee-weary passengers will be willing to pay for wireless streaming or tablet rentals.
If airlines' experience with Wi-Fi is any indication, travelers may take awhile to warm up to the new systems.
Gogo CEO Michael Small says on a typical flight, 6 percent or 7 percent of passengers pay for the Wi-Fi. He says that will increase as the technology improves and the bandwith expands, providing faster connections.
Neil James, executive director of Corporate Sales and Product Management at Panasonic Avionics, says airlines can eventually turn in-flight entertainment systems into moneymakers if they take advantage of their captive audience for advertising or product sales, perhaps.
"That's a unique opportunity that the airlines really need to take advantage of," he said.
Lufthansa's Muller has grand expectations for in-flight entertainment systems and thinks they will transform the flight experience. "The speed of the connectivity will change, so you can do more," he said.
He offered one idea: "You can have people comment on a movie on Facebook while they're watching it."