When it comes to supporting the next generation of content, over-the-top (OTT) operators, cable, IPTV and satellite companies are all eyeing the opportunity: and are starting to make real investments when it comes to getting content to consumers. For instance, Amazon Studios has announced that it plans to shoot all 2014 full original series, be they comedies and dramas, in 4K UltraHD—the latest in a line of content announcements that show a rapidly maturing market.
4K is the latest and most advanced in high-definition video, utilizing displays with an aspect ratio of at least 16:9 and capable of showcasing video at a resolution of 3,840 x 2,160 pixels or 8.3 million pixels—that’s four times the number of pixels as standard full HD. The technology faces a number of challenges, including the expense of the TV sets required to view it, and the fact that it takes eight times the bandwidth to deliver versus a typical HD stream. But the cost of sets is coming down and encoding technologies like HEVC are addressing the delivery hurdles—so it’s a lack of content that looks as the largest market obstacle for now.
In any event, the mass-market deployment of 4K (a.k.a., UltraHD) is really a case of when and not if, according to Futuresource Consulting, which predicts that 4K sets will grow from shipping just 62,000 units last year to 780,000 by the end of this year, and up to 22 million units in 2017. So the early mover companies that leap into the breach stand to win significant cache and market share.
That’s not something that’s lost on Amazon. "As a premium original content creator, we’re excited about 4K and the future of UltraHD technology, particularly as we move into drama series next year,” said Roy Price, director of Amazon Studios. “All of the pilots and series we produce next year will be shot in 4K. That includes our first-ever drama series that we will greenlight next year—we think customers are going to love watching these series in the highest resolution ever available to consumers and we can’t wait to deliver it."
Amazon’s announcement follows a first-mover step for Netflix, which opted to shoot the popular Kevin Spacey drama House of Cards in 4K when it filmed it in 2012. Earlier in the year it said that it was actively working on upping its Ultra HD game, with a goal of streaming 4K content on the service "within a year or two."
Neil Hunt, Netflix' chief product officer, told the Verge that streaming will be the best way to get the 4K picture into people's homes, since there is a lack of an accepted broadcasting and transmission standard that meets the defined UltraHD TV spec. This will hamper 4K efforts for linear television providers like cable and satellite in the short term.
"Because of the challenges involved in upgrading broadcast technologies and the fact that it isn't anticipated within the Blu-ray disc standard," Netflix has an opportunity, Hunt explained. "Clearly we have much work to do with the compression and decode capability, but we expect to be delivering 4K within a year or two with at least some movies and then over time become an important source of 4K."
He added, "Our goal is for people to get immersed in the story, whatever that is,” noting that the quality of experience will have to be satisfactory in order for the company to pull the trigger on 4K. "And to that end, we try to make the technology as seamless and smooth as possible. If people notice the rendering of the picture or the user interface, then that's subtracting from the experience we're looking for."
The company has already started testing the technology with a clip dubbed “El Fuente,” which is essentially B-roll footage that the company uses for internal tests. El Fuente is an eight-minute, 4K UltraHD montage video featuring fountains with kids, bicycles and fruit markets.
Traditional pay-TV companies and content owners are looking to stream 4K via digital distribution as well. BBC Director General Tony Hall recently outlined a future that would rely much more heavily on online content than it has in the past. At the heart of the plan is a new version of the iPlayer, which is its existing TV Everywhere initiative. To date it’s really been a destination for providing catch-up TV service, but the Beeb now plans to add iPlayer-only curated content and channels, and the chance for users to access content before broadcast at times that suit them. And, as well as watching in high definition, the new iPlayer would provide a toggle to view streams in UltraHD/4KTV format. In fact, the new iPlayer may support 4K before regular BBC broadcasts do.
That said, regular 4K programming tiers for broadcast environments are being worked on. Satellite capacity providers like Eutelsat are trialing their own 4K delivery channels, while U.K. pay television provider BSkyB successfully demonstrated what it claims was the world's first satellite broadcast done in 4K back in September at IBC.
Elemental, which counts Comcast (NASDAQ: CMCSA), the BBC, Japan's NHK and Spain's Telefónica as customers, said that it will work with “several broadcasters” to showcase the 2014 Winter Olympics in Sochi. While no specific plans have been made public, Comcast and its NBCUniversal subsidiary, which has U.S. multiplatform video rights to the Olympics, demonstrated the delivery of Ultra HD content from NBCU's Syfy at The Cable Show in June, working with Elemental, Broadcom, Intel and Arris.
Also, DirecTV is looking at how to support the technology, having filed several applications for 4K brand names, like “4KNet.”
"4,000 and 8,000-line services are great for the satellite industry, and will ensure that satellite broadcasting continues to distinguish itself for image quality of service. We see this as a key strategic advantage for us," DirecTV senior vice president of space and communications and research and development Philip Goswitz said at the Satellite 2012 conference.
That’s a sentiment that DirecTV’s president and CEO Mike White addressed during the company's third-quarter earnings call this year, confirming that the satellite giant is prepping a nationwide rollout of 4K.
"After the experience with 3D, I think there's a level of 'protect your options,' because it's a very complex rollout that would be required," said White, acknowledging the need for consumers to upgrade their TVs and the low install base thus far.
Yet, "we are working on it," White said. "We'll be ready."
Analysts expect the aforementioned advances in video codecs to heat up the market, setting up a new competitive arms race in 4K. "The recent standardization of HEVC/H.265 will improve video quality and double the data compression ratio compared to H.264/MPEG-4 AVC, making it possible to offer native 4K TV content across all TV access platforms," says Gavin Patterson, Research Director at Dataxis. "Pay-TV companies are most likely to invest heavily in 4K TV so they can compete against OTA broadcasts and OTT services, with the battle for dominance likely to be reignited between satellite and cable operators."
In any event, there will be a pent-up market waiting for the services. Dataxis said that in the US, only 58% of households with a 4K TV set at the end of 2018 will have the potential to access native 4K TV programming from their TV providers – equivalent to 38.16 million households.
"The first generation of 4K TV set owners will have to rely on media players, games consoles, and compressed download systems to view 4K content, although many channels have already started running their own 4K TV trials to launch programming around the 2014 World Cup and 2016 Olympics," said Patterson.
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