Services Global Viewpoint – June 2016

Sales of UHD TV Sets Surge, But There Is Still Little to Watch

Ultra high definition television is surging in store sales, as viewers opt to replace their HD sets at home. But providing 4K content is another matter. It’s a high risk business and not clear yet that anyone will win in the end.

Ultra high definition television sets — the kind with 4K resolution — are rapidly becoming mainstream, with projections that about one in every eight North American homes will own a UHD TV receiver by the end of this calendar year.

That equates to more than 11 million homes, said Strategy Analytics, who said rapidly falling prices of UHD sets has caused a sales surge of more than 70 percent. Also, standard high definition TV sets are becoming increasingly hard to find at retail — another factor in the extraordinary sales of 4K TVs.

The new data from Strategy Analytics also found that more than 80 percent of the new UHD TVs shipped in 2015 were 50-inches or bigger in size. By 2020, the research firm predicts that all 40-inch and larger TVs sold in North America will be Ultra HD. By that time, almost half of North American homes will own at least one Ultra HD TV.

David Watkins, author of Strategy Analytics report

David Watkins, author of Strategy Analytics report

“Attention is now turning to other attributes that fall under the Ultra HD umbrella such as high dynamic range, wide color gamut and high frame rates,” said David Watkins, director of Strategy Analytics’ connected home devices service. “A high proportion of mid to high-end Ultra HD TVs sold this year will support HDR which in combination with higher resolution and enhanced color representation will deliver a significant step change improvement to the TV viewing experience beyond resolution alone.”

North America and Western Europe lead the rest of the world in the adoption of UHD receiver technology.

North America and Western Europe lead the rest of the world in the adoption of UHD receiver technology.

While UHD TV technology seems firmly established in the home, the content side is lacking. Streaming services such as Netflix and Amazon are making new shows in UHD and offering some UHD programming on the air now, but there are still less than ten full time UHD channels operating globally today. Most UHD owners currently watch up-converted fare.

One of the reasons so few players are delivering 4K content is the extraordinary cost —and risk — involved. Content owners have to factor in the high price of bandwidth, the technology infrastructure, security, device capabilities and, of course, the content itself. For those without a way to provide a huge, secure pipeline to the home, the obstacles can be daunting.

A new report from Irdeto, a specialist in media content security, argues that satellite and cable TV providers are the best position to roll out UHD content distribution in terms of bandwidth and sustained image quality. OTT, or “over the top” service using the internet, is widely perceived to be the route for on-demand UHD programs, wrote Bruce Curtin, Irdeto’s technical product manager and author of the report.

Bruce Curtin, author of Irdeto report

Bruce Curtin, author of Irdeto report

Various groups are organizing to tackle problems associated with UHD. The Ultra HD Alliance was formed in 2015 between Sony, Netflix, Disney, Samsung and Twentieth Century Fox to create open standards and spur growth in the 4K market.

Also in 2015, the sporting world made significent moves to produce and deliver live UHD content, including every match on Central Court at Roland Garros and the German national football (soccer) finale. Since then, live UHD broadcasts of sports are being done regularly throughout the world.

To tackle the issue of technical specs, MovieLabs was formed. It is a joint venture between the six major Hollywood studios to organize consumer media distribution and use. The group developed two different specs for producing and distributing 4K content.

One is the “MovieLabs Specification for Next Generation Video,” which describes the standards used by the studios to produce 4K content. The other was designed to address the best practices for security with the 4K content.

For those entering content distribution of UHD, offering 4K content creates tremendous pressure. Experts warn that the move should only be considered as a way to enhance — not replace — existing business models and infrastructure investments.

Potential pitfalls factored into any on-demand 4K strategy are bandwidth and licensing fees, migration costs, 4K piracy and risks to the operator’s existing business model, said Curtin in the Irdeto report.

While OTT content providers have cornered the early UHD market for on-demand viewing, terrestrial broadcasters have a potential opening for providing consumers with live 4K broadcasts.

A characteristic of live events is that all of the viewers come online at the same time. Due to the just-in-time nature of the live experience, Curtin said, a video compression standard for UHD has been developed that reduces the bandwidth requirements for UHD streaming.

Called HEVC/H.265.HEVC, the standard achieves only 30 percent compression of streamed content. This makes scaling live UHD content extremely costly for OTT providers in terms of the enormous amounts of bandwidth that must be reserved in advance.

Offering a competitive live 4K UHD or UHD Premium experience means streaming content at 15 to 40 Mbps, depending on the level of frame rate and HDR support. To maintain that throughput, an OTT provider would either need to have a proprietary dedicated network, or a massive content delivery network (CDN) across the region with numerous points of presence (POPs) delivering sufficient bandwidth directly to the consumer’s home, Curtin said.

“As a result, broadcasters currently have a significant network advantage over OTT vendors in the delivery of live events,” he said.

Satellite broadcasters have no CDNs and no need for network infrastructure updates, which makes it feasible for them to create the bandwidth that can sustain UHD quality and scale it at no extra cost.

Once the operator migrates to UHD and the service is initiated, there are no further expenses. Setup involves introducing the compression technology at the headend and then freeing up the necessary bandwidth on a transponder.

Consumers gain access through a gateway STB at home that provides a sustained 15-40 Mbps of throughput. The stream can be forwarded at the same or nearly the same quality to all devices in the home. If everyone jumps online for a live event, there is no impact on the broadcaster’s infrastructure.

As complex as UHD delivery can be, potential operators need to find a trusted partner who can help them meet the security requirements to acquire premium 4K UHD content, while also supporting exible CA and DRM solutions that enable them to offer the maximum array of services with their existing content, said Curtin.

With the right partner, operators will be able to explore new business models and revenue opportunities while monetizing all of their content. Equally important, he said, the trusted partner must be able to provide operational security in the form of mature anti-piracy and breach response services to support operators in the event of piracy.

Service companies are already supplying a wide range of services that can used by UHD content providers. One area is live production capability, with new UHD mobile trucks under construction for NEP, Globo and Arena Television.

Arena TV UHD Mobile Unit

Arena TV UHD Mobile Unit

For example, Grass Valley is supplying Arena Television, one of the UK’s leading outside broadcast service providers, with upgrades for three new mobile trucks for UHD live video production.

Arena’s OBX is the first truck to be equipped with this new technology. The second truck, OBY, is due later in 2016 and OBZ will follow in 2017. Arena is working closely with systems integrator, Videlio, to design and outfit the trucks.

London’s Timeline Television, a provider of mobile service to all networks in the United Kingdom, just supplied UHD broadcast services for the BT Sport at the Europa League Final between Liverpool and Sevilla from Basel, Switzerland.

It was the first time the Europa League Final had been broadcast live in UHD and the first time Timeline’s new UHD 4K truck had broadcast from mainland Europe.

For NBC’s coverage of the 2016 Olympic Games in Rio de Janeiro in Brazil, Tektronix is supplying UHD test equipment to check the 4K signals. Other vendors, including Harmonic with it’s ViBE 4K real-time encoder, ATEME with its virtualized UHD encoder-transcoder, Minerva with its 4K/UHD set top box and Semtech with its integrated circuit seek to simplify UHD infrastructures. Each vendor is contributing to various parts of the equipment chain.

Though 4K has entered the home through UHD, supplying programming is very tricky. Bandwidth and infrastructure improvements are expensive and it is far from known whether enough viewers will pay the premium cost for improved picture quality.

And, of course, 4K resolution is not an end goal. Even higher resolutions, like 6K and 8K, are on the horizon and it is anybody’s guess how long 4K will last before a better technology usurps it.

It’s a high risk game for everyone involved and it’s not clear who, if anyone, will win in the end.

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