Ultra-HD: The Future Starts Now
Imagine it is the year 2016 and you need to replace your flat-screen TV. You go to your local retail outlet and find a 55-inch 4K TV priced at around $1,600. Some may think that this price is outlandish, but according to Tim Alessi, director of new product development at LG Electronics USA, these prices could be the reality in the near future.
“By 2016, I think you will be able to buy a 55 inch UHDTV set for around the $1,500 to $1,600 price range, offering a sixty percent premium over a 1080p set,” he says. “However, that is an average. There may be sets that cost more (or less). Right now, our 84 inch set is around $17,000 to $20,000.”
UHDTV is the next “next big thing” in the broadcasting industry. It seems like this industry, however, has had many next big things in recent years, and with the lack of progress in 3-D TV still fresh in mind, many wonder whether or not the prospects for UHDTV will be any better. Jose Del Rosario, an analyst at NSR believes cautious progress will be made over the next few years. “The market will probably begin commercial service by 2015 but the level of uptake will be slow,” he says. “It is only around the 2020 timeframe when a relatively high number of UHDTV channels will be available to pay-TV customers for bouquets that feature five to 10 UHDTV channels. Globally, the aggregate number of UHDTV channels should approach the 200 channel mark.”
Given the likely bandwidth demands, UHDTV could offer the satellite industry yet another new growth opportunity. Thomas Wrede, vice president of reception systems for SES, admitted that some of the operator’s customers are starting to get excited about the topic. “[Our customers] are motivated to look into 4K and UHDTV,” he says. “I think anyone who has seen UHDTV demos has seen that this provides a similar jump in improvement that HD did compared to good quality SD. What we observe is that consumers like the larger screen sizes. The preferred size has gone from 28 and 32 inches to more than 40 inches. A lot of people, including myself, have a 55-inch screen. This is clearly boosting the market. Screens are becoming more affordable, and this is a clear trend in the market. I think ultimately 4K has the potential for the mass market.”
While there is optimism on behalf of the likes of SES and Eutelsat that UHDTV will become a reality in the near future, there are technical issues that do need to be resolved. “We are waiting for the HDMI forum to come up with a display interface standard that can accommodate 50 and 60 frames per second, and ideally 100 to 120 frames per second. We call that HDMI 2.0,” says Wrede. “We expected some announcement from the HDMI forum during CES, but it was postponed; it is now planned for June. What we have to understand is that we have a new encoding technology that is rolling out to market with a final draft standard (HEVC). There are some technology implementations that have to happen before we can think about a commercial launch. We can do and have done test transmissions. We have asked the Asian TV-set manufacturers, if you buy a $20,000 4K TV set now, will you, when this standard comes in, have to buy a new HDMI 2.0 interface, or am I limited to the 30 Hz that HDMI 1.4 can bring? That [HDMI 2.0] is the biggest one on the wish list for 2013.”
The United States was the first country to see a robust take-up during the previous HD video evolution and was very much ahead of the curve. Wrede does not expect something similar to happen in terms of ultra-HD. “What I am observing is that the United States, Japan and Korea will be the launch pad for new content offerings, and also how to market these bigger screens with 4K capability,” he says. “But, in terms of trials I would say the United States is very much going head to head with Europe here. We have discussed this with some of our U.S. customers. I don’t have the feeling there is a big difference in terms of how things are moving ahead,” he says.
Pay-TV Perspective
For UHDTV to really takeoff, it will need pay-TV operators to really embrace it. The good news for the satellite industry is that major DTH operators such as Sky Deutschland and SkyPerfect JSAT are already looking at bringing 4K channels and content to their platforms in the near future. Wrede admits SES is in discussions with pay-TV operators, but those discussions are at an early stage. “It is clear, as with 3-D and HD, these pay-TV operators will be the first ones that provide a business case. We have spoken about time frames and a broadcast standard. The operators are very committed regarding an introduction of UHDTV services,” he says.
Sky Deutschland, one of Europe’s largest pay-TV operators based in Germany offers over 60 HD channels and is already in the test phase for 4K TV. Stephan Heimbecher, head of innovations and standards for Sky Deutschland, says the company is convinced that UHDTV will be a big hit with customers in the long term. “The success in HD gives us a lot of motivation to look into the next evolutionary step – UHDTV,” he says. “However, for many different reasons, we can’t predict when this will become a commercial reality. While first UHDTV panels hit the market, they are not really affordable for the masses yet and it will also take a bit longer for compelling UHDTV content and especially live sport production to become available. You have to bear in mind that the test shoot we did in December 2012 at a German football match was far from a regular live production. The main purpose of this test was to get a first feeling for what UHDTV sports productions can look like on consumer television sets,” he says.
The key challenge for operators like Sky Deutschland will be the ability to offer these services in an efficient way. Heimbecher says the company will conduct additional 4K TV test transmissions throughout 2013. “UHDTV resolution means four times full HD, hence we are dealing with four times the number of pixels, which increases the amount of data and also the bandwidth to deliver such content to consumers. HEVC has just recently been standardized and is providing up to 60 percent more coding efficiency. However, UHDTV will also require a new generation of receivers and that is a process, which just takes its time,” he says. “Given the expected coding efficiency of HEVC, we hope that in the long term we will be able to broadcast UHDTV channels at almost the same data rate that we use for HD channels today. But as with all new coding standards, it will take two or three generations of encoders to reach that kind of efficiency.”
Heimbacher says the operator is committed to being among the first operators to make UHDTV services available, but adds that prices for UHDTV displays need to drop for the standard to be adopted by the larger mass market. “Analysts predict that UHDTV panels will be available for under $2,000 in five years time,” he says. “The prediction for 2015 suggests that about one million displays will be sold worldwide.”
The numbers sound impressive, but UHDTV is not even on the roadmap for some satellite operators. For example, Middle East pay-TV operator OSN, a pioneer in bringing HD services in the region, has no plans right now to offer UHDTV services. Mark Billinge, vice president, broadcast operations and technology, OSN, says that while his company is tracking the technology, the question remains whether it is being driven by the consumer, the broadcasters or the TV manufacturers. He believes it is more a case of the latter.
“I think UHDTV is in its early days in terms of growth,” he says. “From our perspective as a hardware platform, it is a technology that is at least two-to-four years away for us in supporting in the set-top box. Even then, we have to have content and channels. I don’t think we will see the rapid growth as we have seen for the HD platform. I think it would be a much more niche offering if and when it does occur.”
Billinge explains that OSN is not buying into what it perceives as hype surrounding UHDTV and notes the failure of 3-D TV to achieve the roaring success that many had predicted. “3-D-TV received a very mixed response from the consumer,” he says. “We offer 3-D services, but it is not a core selling point. Then you have smart TV, which has struggled to find its niche in the market with consumers. I think 4K TV is the next progression along those lines of selling new panels. I think time will tell, with the average viewing distances, we will have to see if 4K TV is required in the average home; it is yet to be seen. For OSN and similar broadcasters, a big transition to 4K may well require another major investment and technology change from top to bottom. Whether 4K will demand that change the way HD did, remains to be seen.”
Japan
Another pay-TV operator likely to be one of the early pioneers in bringing these services to households is SkyPerfect JSAT in Japan. This country will likely see 4K and 8K broadcasts before many other markets. Yutaka Imai, who works on the service development team at SkyPerfect’s platform service division, says the operator, like Sky Deutschland, plans to do a number of UHDTV test transmissions this year. Imai says the company has made “active efforts” in working to implement UHDTV broadcasting in a few years and believes that satellite will play a major role in its plans.
Japanese broadcaster NHK is also pioneering efforts in UHDTV. The broadcaster held Super Hi-Vision (SHV) public screenings of the London Olympics in Japan, the United Kingdom and the United States. Keiichi Kubota, NHK’s executive director general of engineering, says these events marked a practical milestone for the company.
“We had been looking to start test broadcasts in 2020. However, considering the progress of related technologies, we have been discussing the possibility of moving this target year forward. For example, we may be able to offer much more practical equipment around the time of the 2014 FIFA Brazil World Cup or the 2016 Rio de Janeiro Olympics,” Kubota says. “To achieve this, we will need to organize internal systems comprehensively, from content production to distribution and playback. It includes, for example, development of capture and recording systems, high-efficiency coders and receivers for home use.”
Imai believes satellite will be fundamental to the success of UHDTV in Japan. “Any other transmission methods except satellite will not be able to maintain the stability of cost and distribution to deliver large video data to homes across Japan,” he says, adding that, compared to others, satellite will need a shorter period for preparation to implement UHDTV. “It would be possible on the Internet in the future, but it will take even more time.”
Hardware
Given the investment that households have made in upgrading to HD, it remains to be seen whether or not UHDTV captures the imagination in the way that 3-D TV did not. Ultimately, UHDTV is far better suited to larger screens, which is a key differentiator from HD. Alessi says LG is bullish on the ultra-HD market and believes that this year will mark the first full year of availability of TV sets. “In addition, LG will bring 65-inch and 55-inch models to market, extending its line of UHDTV TVs to offer consumers choice in screen sizes.”
The market in North America could be a key barometer for the success of UHDTV market going forward. According to Alessi, manufacturers are expected to sell around 40 million units in North America in 2013. “A small percentage of that will be 4K units, but if you look at growth of sales in the 50-inch and above screen sizes within the next three years, 4K could be as much as 20 percent of the total units sold within that segment,” he says. “This is a pretty good indicator of the growth in the UHDTV category. It will take a little while for premiums to come down. For example, a $20,000 set is targeted at a specific market of consumers looking for a distinct screen size. The introduction of 55- and 65-inch screens will drive this technology into the mainstream. However, I think we are a couple of years out from really attractive price points here.”
Additionally, Alessi believes that his estimate ratio on 50-inch sales might be conservative in a significant addressable market. “We expect market share of these high-end ranges of TVs to grow to the 30 percent, or around 11 million to 12 million units over the next several years. That represents a significant addressable market for consumers looking to purchase UHDTV versus 1080p sets,” he says. “If it is reasonable price step, I don’t think people will see a downside. I think in the next two to three years you will see it start to hit that next level of adoption. Hopefully, we will start to see some more content solutions. In order to really drive the adoption, there will need to be an awareness of what real UHDTV content looks like.”
One of the most consistently asked questions about UHDTV is how far the growth market is from becoming a reality. It seems that the predictions range from around 2015 all the way into the next decade. Del Rosario says the market’s early exuberance toward UHDTV may well fade before it reaches its true potential. “UHDTV could be mass market over the long term – around the 2022 time frame or in about nine to10 years. Given this time frame, the industry may not be as excited or its excitement over the market may fizzle out after the initial exuberance, then pick up again when the market becomes more developed in 10 years.”
Wrede, however, maintains that UHDTV will become a key market for SES. “If you look at the bandwidth assumptions and quite a number of UHDTV channels that might come to market, you can draw some conclusions on the bandwidth potential,” he says. “For us, UHDTV is a priority topic this year and next year, and we are planning things very carefully.”