In-flight Wifi is an amazing thing. My first time experiencing it (on Virgin America) was one of those rare moments of "holy cow! we live in the fuuuutuuuuuuure!" moments. Despite being a bit pokey, it still completely changed flying for me.
Onboard the plane, there's more than enough bandwidth to stream video from the plane's Wifi router to passengers' phones or iPads, but unfortunately, even with the new, faster Ka-band satellite connections there's still not enough bandwidth between the plane and the ground for everyone to do that. One solution is to bring a large selection of video content onboard the plane and let people stream from a server aboard the plane to their devices.
Lufthansa and Delta have both launched these systems and JetBlue has just announced that they're partnering with Amazon to bring AmazonPrime content to the skies. I feel like this technology will eventually replace seatback entertainment systems and I'm actually happy about that. Lugging hundreds of little TVs and (all of the equipment to control them) wastes millions of gallons of fuel a year and seems exceedingly wasteful given that most people are carrying at least one smartphone or tablet with them already. Furthermore, the seatback entertainment systems seem to be on a much faster innovation schedule than the seats, so it's the first part of your fancy new plane to look shabby and dated.