Date: 27 Feb 2020
Written by: Yoeri Geutskens
In barely seven years, 4K TV has evolved from high-end niche product to not just mainstream proposition but in fact to the low end of the TV market. On its way it’s pushed HDTV out of the market, meanwhile it’s been put under pressure already by the advent of 8K TV. The Resolution Gap was already big; now the chasm is gaping. The overlap has reduced to almost zero. How so? There are several resolutions used in broadcast television: 480p (SD), 720p, 1080i (HD) and 1080p (Full HD). Yes, 4K Ultra HD broadcasts exist but they cover well under 1% of all programs available. Meanwhile in TV hardware, we’ve got two resolutions you can choose from in 2020: 4K and 8K. Most major TV brands have phased out HDTVs, which until last year covered the low end of the market, where margins are low.
4K TV now fulfills that role. That may sound surprising, because 4K ijs relatively new. The first 4K model, the Sony XBR-84X900, was introduced about seven years ago, at the end of 2012, at a price level of $24.999. Now you can buy one at $249.99! That’s a price erosion of 99% over a 7-year stretch, or close to 50% annually. That’s how steep the price erosion is in this business. No wonder even major electronics firms have difficulty competing and remaining profitable, and quite a few have divested their TV operations to license their brand name to leaner manufacturers. Granted, that entry-level $249 TV is a just 43-inch in size – a substantially smaller model than the 84-inch model Sony debuted back then. It’s also a second-tier brand – Insignia. But it uses the same display panel technology (edge-lit LCD), it’s got the exact same number of pixels, and in some ways it’s more advanced. It’s got HDMI 2.0 instead of v1.4 (which could not handle HDCP 2.2 copy protection that most source devices demand, or 4K input at frame rates higher than 30 fps); it can handle HDR signals, even if its peak brightness is not great. It’s got built-in streaming functionality and comes with a range of apps for all sorts of video services. And if size does matter, you can now get a 75-inch 4K TV for well under one grand – one twenty-fifth or just 4% of what you had to pay at introduction.
FAST EVOLUTION FOR HARDWARE:
It may also come as a shock that in this short period of time, 4K has evolved from the very high end of TV to the mainstream and low end of the market. Low end you say? Yes, for a number of brands, such as Sony, the most basic models are now 4K and HD has been dropped from the range. Samsung has confirmed only a single HDTV in its 2020 range – a 32” version of The Frame, their high design models, which by definition are not low end and likely have some margin left in them. LG confirmed they will not have any new Full HD or HD-Ready TV models in 2020. Panasonic would not confirm their plans for this year but so far it seems they have no new HDTV models on offer. At the same time, 4K is moving away from the high end: This year, one year after 8K TVs commercially debuted on the market with models you could actually buy – as opposed to the prototypes we’ve been shown at CES and IFA for years – Samsung has announced it will no longer offer its most premium display features on 4K models; it reserves those for its 8K QLED TV range. 8K now represents the high end, 4K the mainstream and low end. Meanwhile, TV broadcasting has a hard time catching up, because there’s no business model that offers them any incentive to upgrade. They’ll need to replace their entire production workflow, which is expensive and something they normally do once every seven to ten years. However, even when they start producing in 4K, it’s likely too costly to distribute it in that resolution. That’s because bandwidth is scarce, especially with terrestrial broadcast, but even with DTH (direct-to-home) satellite and cable/IPTV spectrum is limited, and a 4K channel simply takes the same capacity as four HD channels, unless you overly compress it, but that would defy the whole point of Ultra HD. Meanwhile 4K doesn’t bring any additional revenues. Advertisers aren’t paying more money to advertise on 4K TV channels, and the extent to which operators can charge more for these channels is limited. As a result, for 4K content we’re dependent on streaming platforms, for which bandwidth is not an issue, at least not their issue. It’s ironic perhaps that while the overall amount of bandwidth available to us increases year over year, the bandwidth for traditional broadcasting does not, and in many cases even shrinks, where airwaves are reallocated from radio and TV to mobile data. Of course, the relevance of broadcasters does not depend mainly on the resolution they’re transmitting their content in, but this widening gap does add to the worries many of them have about staying relevant in a time where we are witnessing a shift from linear TV watching to on-demand viewing, happening right under our eyes.
WHERE BROADCAST TV IS NOW:
It’s 2020, and America’s biggest sporting event, the Super Bowl, only just now got broadcast in 4K for the first time, on selected distribution channels and, significantly, streaming platforms. It may be telling that while the production mostly was shot with HDR cameras, the base resolution was 1080p (with some 720p thrown in for good measure), and upscaled to 4K for distribution. The 2018 World Championship soccer games were shot and offered in 4K/HDR by broadcasters in some 25 countries on one-off pop-up channels, removed again as soon as the event was over. 2019 had no such major sports event, and this year we’ll have the European Championships, likely following the same patterns as the world cup two years earlier. The other main sports event this year is going to be the Olympic Games and again the prospects for 4K TV owners aren’t great, since the transmission rights in most countries are held by public broadcasters, who have even more difficulty ponying up the money needed to facilitate UHD programs than commercial ones. In another ironic twist, the 2020 Olympics take place in Tokyo, Japan – the country that’s the farthest advanced with 8K production. The 8K feed is expected to be available only domestically, but in Japan the market penetration of 8K TVs is going to be lower yet than in North America and even Europe. That’s because Japanese living rooms are typically much smaller than American ones, and TV sizes are proportionally smaller (and resolutions accordingly lower).
WILL BROADCAST TV EVER CATCH UP:
Will broadcasters ever catch up with the resolutions consumer TVs have arrived at, or should we accept that there will forever be a discrepancy between the capabilities of the displays we’re watching and the content we’re viewing on it? Given the economic realities of the TV business, probably the latter. This is not a new phenomenon however. Even as HDTV hardware had attained dominance over SDTV in the market, most channels were still in HD. It’s just that the gap is getting wider. Someone watching the local news on a high-end TV in 2020 may very well be looking at an SD signal upscaled for an 8K display. That will not look great. Whether it’s acceptable depends on how critical the consumer is, and on how compelling the content.
THE HDR ALTERNATIVE:
One way for broadcasters to catch up with the TV hardware evolution is to start transmitting programs in HDR. According to the Ultra HD Forum, 1080p HD with HDR also qualifies as Ultra HD and frankly, improved dynamic range contributes more to picture quality than increased spatial resolution. It takes only a modest amount of extra bandwidth – between 0% and about 25% over an SDR channel, depending on the HDR format used. This changes the economics drastically. To what extent broadcasters will need to overhaul their production workflow again depends a lot on what HDR format they choose. More about that in a future article. We seem to have reached an inflection point. What it means for TV hardware and broadcast business only time will tell.
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