No idea on just how far America Airlines intends to bring this idea, since anyone who has a reasonable Wi-Fi connection can already access numerous streaming video sites such as YouTube and Vimeo, but perhaps American Airlines intends for something that is more specific and purpose-built just for their passengers.
Bandwidth, or rather, the lack of it, could prove to be their undoing though unless the compression algorithm is a new one that is super efficient. Assuming the satellite connection is able to handle 10Mbps downstream, that means no more than 10 standard definition movies being played over at any one time, but of course this is assuming we don’t know that there is some sort of secret gigabit connections being installed in mid-air at the moment.
According to GoGo who decided to clear the air, the streaming service will be relying on on-plane storage which makes much more sense, and bear in mind that the total bandwidth is closer to 3Mbps via using EVDO rev A, making video streaming the classical, terrestrial method more or less impossible. Would Wi-Fi connectivity cause you to switch airlines?