Despite the considerable buzz being generated about Ultra HD TV, a closer look at the data suggests the technology is unlikely to grow beyond a niche market…
By Paul Marszalek
BBG Office of Strategy and Development
If you attended CES in Vegas, last week’s Hong Kong International Film & TV Market (FILMART), or Satellite 2013 here in D.C., you undoubtedly heard about 4k TV, also known as Ultra HD.
Even as you try to figure out how to recycle the tube television you still have stored in the basement, here comes the replacement for your new HD TV.
Or perhaps not.
For the manufacturers of televisions and production equipment, as well as satellite bandwidth providers, Ultra HD television is a fantastic solution for their bottom lines. But for consumers, it’s more like a solution looking for a problem.
It’s always dangerous to put one’s self in the Luddite’s position, but after taking a look at some larger trends, it’s very hard to imagine 4k/Ultra HD television as anything larger than a niche product.
We can get beyond the fact that early models price between $17,000 and $38,000 and require a server to be installed in order to handle the huge media files. Those prices will eventually drop.
Ultra HD faces larger issues. And do we mean large.
These TVs look great because there are four times the number of pixels in a 4k screen than a 1080p HD screen. An 8k Ultra HD screen (yes there’s even one better; it’s called Hi-Vision) has 16 times the number of pixels as a 1080p screen.
They look awesome. The problem is, in order for the eye to discern any difference between HD and Ultra HD, the screen has to be big — 84 inches and up. In terms of relegating Ultra HD to the niche market of upper class man-caves, we could stop our argument right here.
For manufacturers, a niche may be enough, considering the TVs cost as much as a really nice car. But for content producers, it’s another question entirely as they’d be asked to foot the larger bill to produce in a format that few can see. And this is where the wheels start to come off for Ultra HD.
At last week’s TV Connect in London, retiring EVP and CTO of HBO Bob Zitter doesn’t see it coming, saying that broadcasters would have little incentive to produce in Ultra HD considering so few even have the space in their homes for the new sets. Point is, if HBO is slow-walking Ultra HD, many will follow that pace.
Without content – a lot of content – the sets are going nowhere. It’s partially what’s gone wrong with 3-D. First it was the glasses, but ultimately, too much of the content did not deliver on the promised experience. 3-D now risks becoming a novelty.
But it’s not just the content producers who will hamper the development of Ultra HD. Somebody has to deliver it.
Writing for Northern Sky Research (NSR), Jose Del Rosario notes that the “real risk-taking has to come from TV content owners and service providers who will be delivering Ultra HD to households. At this stage of the market cycle, there does not seem to be enough impetus towards substantial investments.”
“Although regarded by some in the industry as potentially ‘the next big thing’ or the largest revenue driver for satellite communications, it is NSR’s view that Ultra HD will be a small niche with minimal impact in revenues and channel carriage over the long term, relative to SD and HD growth,” he adds.
If we believe the current doubts of content providers and service providers can be overcome, let’s circle back to see what the consumer is up to.
Turns out the data shows that not only is the consumer fatigued with Plasma, LCD, LED, and OLED choices, but viewing is not trending toward these larger screens at all — instead toward smaller screens such as tablets and phones.
A just-released BBC TV Licensing study showed that TV watching was up – even as the number of televisions in U.K. households dropped from 2.3 to 1.8 over the last decade.
Much of that increase was due to on-demand services including BBC’s iPlayer, which also delivers data pointing to more consumption on smaller screens.
Just before he left the BBC for Shazam, Daniel Danker, former General Manager of On Demand spoke at TV Connect about being somewhat dismayed about the lack of iPlayer viewing on connected TVs (sometimes called Smart TVs).
Over the past year, iPlayer viewing jumped from 12% to 36% on mobile devices, while connected TV was flat at 2%. Said Danker, “This is not a growth curve we can be proud of,” prodding those in the connected TV business to take action on the varying standards being used by different manufacturers.
One would think iPlayer content would be best viewed on the living room screen, but it’s not happening just yet.
All said, Ultra HD may find a niche, but it’s looking a lot more like 2025 than in 2015.