It sounds a lot like what AC Rouge did. Instead of installing heavy, expensive in seat IFE, the stream it over the in plane wifi system. The wifi is NOT connected to the internet outside the plane. I watched a few movies and TV shows. Connectivity speeds were fine with no buffering. This was an AC Rouge 767... full.

AC Rouge offers the ability to rent an iPad for the flight if you do not have one. They also make an announcement at boarding, as well as going around the boarding area reminding people to download the app before boarding. The downside is that AC Rouge planes don't have a way to charge your iPad inflight.

What makes me laugh, is that people are complaining that the app is ready before the official launch. I have a feeling if they did the opposite, you would all be complaining that it was stupid that they have the planes ready but not the app.