4K: a televisual evolutionary step, or a marketing tool?
Tags: 4k, Tech, 4k Video, 4k Tv, TV

Is 4K to become the new standard for broadcasting, or will it continue to be a luxury available only to a select few? What kind of problems will providers run into when starting the service in UHD?

These and many more questions are answered in the BROADVISION analyst’s detailed report.

At first glance, it may seem that the quality of a TV image directly depends on quantity: the more pixels per square inch, the better. We don’t need to look far for confirmation: remember how enthusiastically viewers accepted the HD and Full HD formats.

However, in the case of 4K, opinions vary: some believe it to be just a marketing vehicle, which hardly improves user experience, while others boldly call it the evolution of the media industry.

Attempts by manufacturers to keep up with the growing demand for ultra-high-definition TV have already entailed not only the huge choice in 4K set-top boxes and TV sets on the market but also the emergence of new data compression and transmission standards, as well as 4K content production and storage technologies.

Is the 4K format going to become a new technological breakthrough? Or will it be fixed in the minds of users as an attempt to make viewers buy more expensive TV sets? Let’s consider the facts and figures.

4K TV sets: the hit of the coming years

4K TV sets are undoubtedly the brightest star in the 4K sky. The users and the press are the most interested in them. According to OVUM forecasts, UHDTV is only going to grow in popularity. By 2020, the number of ultra-high-definition TV sets worldwide will exceed 540 million, which is almost a tenfold growth compared to 2015.

IHS and Strategy Analytics predict that already this year, the overwhelming majority of main-diagonal screens (50 inches and over) will support 4K. Soon thereafter, the format will take hold of smaller devices.

Eventually, by 2020, every fourth family in the world will have become the owner of a new UHD TV. The North American market will be ahead of the curve, where 4K penetration will exceed 45%. The West European region will be second, and the market in Africa and the Middle East will be last in the race.

If we talk about individual countries, 4K TV is winning in Japan more rapidly than elsewhere. According to the Mitsubishi Research Institute, half of Japanese families will already have UHD TVs by 2020.

The real behemoths on the 4K TV manufacturers market will be China and South Korea. The largest UHD display factories operate in these countries. The main exporter in this pair will be South Korea, because Chinese manufacturers sell most of their products domestically.

4K set-top boxes: great market share

The market for set-top boxes is going to experience fourfold growth as well. By 2020, they will make up a quarter of all 4K devices sold.

Sales of UHD set-top boxes grow by 10 million units per year. It is planned to have more than 50 million of these devices sold by 2020.

According to OVUM, by 2020, 4K set-top boxes will be installed in more than 225 million homes across the globe. 80 million viewers in North America and 65 million viewers in Europe and Asia each will consume UHD content through a set-top box.

The services market catching-up

Sales of 4K TVs and set-top boxes are growing steadily. However, their owners have already had a significant problem: they have nothing to watch. There are several reasons for this:

● Technological: the production of 4K content is complex and expensive, despite the fact that Full HD content is still popular and pays off well.

● Logistics: not all homes have high-speed Internet.

● Economic: users do not want to buy a subscription, because it is rather expensive and the choice of content is limited.

Despite all the difficulties, this problem will be resolved in the near future. The media industry had previously encountered a similar situation when the Full HD format appeared. The owners of the then-new devices had to wait several years before they had enough content to view.

A growing selection of UHD videos, lower prices for TV sets, 4K set-top boxes, and subscriptions will steadily lead to an explosive growth in the number of users. Most of them will be middle and upper class citizens living in the North American, the Pacific, and West European regions.

In 2021, cable, satellite, and IPTV services will have a larger number of subscribers. Terrestrial TV, with a few exceptions, will not be able to offer viewers UHD resolution.

4K Internet TV

4K IPTV

Despite the fact that IPTV services still have fewer subscribers than their cable and satellite competitors, IPTV providers will be able to earn more from each viewer individually. The main reason for this divergence in profits is that IPTV providers are quicker at introducing new, popular functions into their services, which attract the most solvent users.

According to OVUM forecasts, by 2021, the number of 4K IPTV services subscribers will exceed 10 million. This is more than a 20-fold increase compared to 450,000 in 2017. TV viewers in Western Europe will be the most active in connecting to such services: in 2021, the number of subscribers in this region will be more than 3 million. They will bring $1.2 billion in revenue to operators, which is almost half of global revenue.

4K OTT

According to Juniper Research, over the next five years, OTT services that provide access to 4K content will be particularly popular. According to forecasts, by 2021 the number of unique consumers of ‘over the top’ 4K content will reach 190 million, and the revenues from services will exceed $5 billion.

(Diagram)

A television will remain the main user device for viewing 4K-OTT content, but the widespread adoption of multi-screen technology will make UHD content available on smartphones, tablets, and desktops.

Summing up…

It’s safe to say that 4K content will not be long in coming, and its popularity will only grow. But let’s consider the main factors that influence the speed of technology implementation:

Growth factors

● Demand for High-End electronics

● The emergence of new UHD channels and services

● 4K equipment getting cheaper

● Development of compression algorithms and data transmission technologies

Constraining factors

● UHD equipment is still not affordable for most people

● Since the market is just emerging, many investors won’t risk investing in it

● Creating 4K content costs several times more than creating Full HD

● The network infrastructure required for 4K video transmission is not developed

● Residents of remote or small communities do not have access to high-speed Internet. 4K content will not be available to them for a long time.

Already now, operators have a difficult choice: either to create their own 4K service, while there is no competition and demand is steadily growing, or to focus on Full HD until their viewers’ networks are ready for 4K broadcasting.

A high-quality image is not enough to win the love of users. Content has to be interesting. This is confirmed by the shows that have been filmed on a smartphone camera, but were able to win over millions of viewers.