4K TV Could Be Opportunity for Pay TV and OTT Services

4K TV Could Be Opportunity for Pay TV and OTT Services
People who have seen 4K TV say that once you’ve seen it on a
50 plus-inch TV, there’s no going back — just as there was no
going back to SD once a viewer had seen HD.

Makers of TV sets love new technologies that lure consumers to
purchase new sets even before the old one has stopped working.
Their efforts at making 3D replace HD have been less
successful than they anticipated so now they have turned their
attention to a new video technology called 4K. If it takes
off, then consumers will want 4K video from their OTT services
and the demand for bandwidth will accelerate.

Futuresource Consulting held a Webinar called “Going 4K:
Looking Beyond the Hype” that helped clarify 4K. It explained
that all of these names are the same technology:
Ultra HD, the term that TV makers are using

All describe TV sets and videos that have a pixel count of
3840 by 2160, so the increased broadband and home networking
bandwidth they will need is significant, especially to deliver
4K videos to mobile devices, via either cellular or Wi-Fi.

The Digital Cinema that is used in theaters is an even higher
pixel count. It has a variety of resolutions, including 4096 x
2304, 4096 x 2160 or 4096 x 2048.

On the Down Side
Futuresource said there’s very little 4K equipment currently
available for the broadcast industry and ESPN has said it will
not have 4K in its new production studios.

In addition, the transition from analog TV to digital is still
in full swing in many European countries. Industry analysts
such as Futuresource are concerned that the once highly-
promoted 3D has not lived up to its hype. As evidence it
showed the proportion of the broadcast TV market accounted for
by non-3D TV sets in EMEA:
2009 99.6%
2010 96.9%
2011 98.1%
2012 99.3%

On the Up Side
On the plus side, there will be content. 4K production has
become well-established at the Hollywood studios over the last
18 months and their scanning of back catalogue titles is well
under way. 4K is still limited in movie theaters, as only
around 50 4K films have been released so far.

4K is a natural progression, Futuresource said — from SD to HD
and now to 4K. Unlike 3D, there are no barriers such as
special glasses. Additionally, the prices for professional
camcorders have started to decline — 13% over the last four
years to about $773 on average in the US.

The biggest current barrier to 4K is the broadcasting of 4K.
The broadcast industry, Futuresource said, is suffering from
“upgrade fatigue” and the faltering economy makes it harder to
launch a new technology. There is also a lack of standards
when it comes to camera technology. 4K needs double the frame
rate for scenes with lots of motion.

That means bandwidth is the barrier that broadcasters have now
and that OTT services will have later. However, new
compressions schemes are being developed such as the next-
generation HEVC (High Efficiency Video Coding), which
compresses by 33% to 50% more than the current H.264 standard.
It’s due to be confirmed as a standard in January 2013. 4K
video that has been compressed by HEVC needs the same
bandwidth as HD originally did with MPEG2 compression.

Futuresource said pay TV companies are likely to invest in 4K
so they can compete against over-the-air broadcasts, which
there are lots of in Europe, and OTT services. Some operators,
it said, are already testing and evaluating. It mentioned
DirecTV, Comcast, Sky, Canal+, SES Astra and Brazil’s Globo

Blu-ray makers are likely to push 4K so they will have a new
generation of 4K Blu-ray players that they can sell at premium
prices and hopefully create renewed interest in sales of discs
which have to date been disappointing. A new Blu-ray standard
is being discussed that could include 4K. A task force is
looking into the matter but nothing has been scheduled.

4K content presents an opportunity for OTT services, which may
look to charge a premium for it, Futuresource said. They could
do revenue-sharing deals with broadband service providers that
could ensure their subscribers to get the highest possible
video quality with minimal buffering.

Futuresource listed the hurdles that have to be overcome for
4K to succeed:
– Deployment of 4k TV sets and other hardware in the
consumer’s home
– Sufficient content available
– The currently low level of interest at pay TV companies
– Content has to be upscaled to 4K

Futuresource said 4K gives the pay TV industry:
– A new technology to drive subscriber growth, customer
retention and possible new revenue streams
– A chance to steal a march on OLED
– A key enabler for glasses-free 3D

Consumers will like it because of its greatly improved video
and a level of reality that surpasses 3D, it said.

TV makers are currently focusing on extra large (60”+) TV sets
although Toshiba did launch a 55” 4k model earlier this year.
Current prices for these sets range from $10,000 up to
$25,000. Those prices will drop if and when volumes and
manufacturing efficiencies increase just as they did for HD
sets. Sony, Toshiba and LG are currently publicly committed to
making 4K sets. Chinese and Taiwanese display makers have
started producing 4K panels.

Will Consumers Buy 4K?
Futuresource thinks some consumers will pay for 4K sets and
content. It expects that more 4K models and content will
appear in the second half of 2013 and predicts 4K sets to
start selling in quantity in 2016 but even so will only
account for 15% of all TV set sales in 2020 in the USA.
However, upwards of 29% of big screen TV 50-inches and higher
will be 4K by then.

The full Webinar is at

Android & iOS Replace Wintel Pair in OS Market
What would have been considered impossible a few years ago now
seems expected.

The Wintel pair’s share of the operating systems market is
headed down from a high of 96% to an estimated 35% this year
according to this slide from Kleiner Perkins’s partner Mary
Meeker as shown in the slide.

Meeker used the slide in her annual “Internet Trends”
presentation at Stanford University this week.

What else is there to say?

One other slide will interest the broadband crowd and that’s
the rise of mobile phone subscriptions compared to the number
of fixed telephone lines. It predicts that fixed lines peaked
in 2006 and are actually on a slight decline.

AT&T, Verizon and other telcos that sell both cellular and
wireline services certainly consider the transition when they
decide where to invest their capital.

The complete set of Meeker’s slides is at:

They’re worth studying for their overview of every aspect of
the Internet-based industry.

About the Author

The Online Reporter is the weekly subscription-based strategy bulletin about the enabling technologies of broadband, Wi-Fi, HDR, home networks, UHD 4K TV & OTT services; identifying trends in the Digital Media space. Only a fraction of our material here is published here. To see 4 free copies, follow the links above or go to www.onlinereporter.com/trial-subscription/

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