My understanding was that this is part of their on-plane server that you connect to via their wifi connection (for free). I think Southwest capitalized on a bet by skipping all the of the terrible touch-screen based back-of-seat entertainment systems and simply host a bunch of content and live TV on the plane that anyone with a device can connect to. People already carry around all the devices they need as they said.
To quote from the article, users will use their own devices:
>To use Beats Music free on aircraft, users will have to have a device compatible with the Beats app, which includes iOS and Android, and can also work with any web browser that works with the browser-based Beats streaming site.
I believe both Virigin Australia and Qantas are moving towards providing in-flight iPads for people to connect to a wifi network. Virgin let you use your own iPad with their app to browse all the media, which ostensibly stops you from just pirating their content. I think Qantas loan you iPads from their own stash.
This is now just a big corpus of music for those systems to draw on. It means you can listen to whatever you want without having pre-loaded music onto your device. It makes good sense to me.
Planes are the only place where I have to plan ahead and load music into local storage. Everywhere else I just stream. Fixing that would be nice, even if not a huge deal.
I wish Apple would partner with Southwest to put a couple usb outlets in the back of each seat instead...