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Why UHD (4K) does not matter for the OTT TV industry (but HEVC does)

HTH_9288 Anyone who visited IBC this year probably wasn’t able to avoid all the 4K (also known as UHD) signs filling Amsterdam’s Rai venue. Signs with HEVC/4K were placed prominently in many of the halls, typically demonstrating 4K transcoding, cameras, delivery methods, STBs and even some UI on the occasional UHD 84-85″ giant TV.

Given all the hype and excitement, one can only deduct that 4K is the future of OTT and the entire industry. Not a week goes by without 4K news about some OTT initiative that promises to deliver 4K to the home “at last”.

It’s all hogwash… This overhyping is no more than a bubble, as any plans to deploy 4K over OTT are largely fantasies and wishful thinking. The ink has hardly had enough time to dry on the H265 standard, which means that most HEVC codecs weren’t really tested across platforms and it will take a year or so for equipment to start interacting cross platform and cross companies – remember how long H264 took to work itself out. TV manufacturers have been experiencing the first ever decline in overall TV sales figures (6.3% decline in sales since 2011) and are desperately looking for new gimmicks to increase sales and spark up consumer interest – which is why UHD/4K has become such a big name is so little time.

However, short of a few rich geeks, no one really needs or knows they want an 85″ UHD display yet… HDMI 2.0 was officially announced and released just before IBC, with few major manufacturers (short of Panasonic) who have announced specific models supporting it at IFA Berlin. Although the existing standard HDMI 1.4 actually supports the 3840×2160 UHD resolution (4K is actually 4096×2160 and is a professional cinema standard), it only supports it at up to 30FPS and with only 8 bits per color. HDMI 2.0 will support the full capabilities of UHD, including  larger color gamut (REC2020) and better color resolution (30 bit color should be enough)which are really critical for enhancing the image beyond just plain resolution.

The real bulk of HDMI 2.0 display will be announced at CES in January 2014, so they will probably start showing up in US stores starting in March 2014 at the earliest. Other areas of the world should see these displays mid to late 2014. Expect them to have a price premium and drop in prices the following year.

So, any OTT initiatives including UHD/4K, would likely require at least one more year before demonstrating anything that can be realistically be deployed. Even then, this type of solution would be far from the mass market, it would only be relevant to a handful of lucky/rich individuals who would actually need or want such a service. Given the price of UHD displays today (a typical 85″ UHD display costs around $20,000 in the US, and roughly the 20,000 Euros in Europe), prices will drop to mass market in 2015 at the earliest.

The reason why OTT is likely a good candidate for this technology is that no one really believes that the market will bear another Bluray standard modification (the forth standard revision after the 2 layer change and the move to 3D).

Given all of this, it’s hardly a surprise that only one Hollywood studio is actually bothering to master its content in native 4K format. Sony studios is that studio and it has already announced its own plans to directly distribute 4K material over the free internet (OTT, but not streaming). This will be done via their own dedicated player. If they can do it, why can’t every other OTT TV company follow?

The answer is simple, because Sony wants to own 4K. As the sole producer of original content, why would they let anyone compete with them on prices for their own original content?

The only other company dealing with resolutions beyond 1080P, is actually Apple which already has a few displays with higher resolutions than FULL HD. Retina displays on iPads go slightly above the FULL HD standard, and the retina Macbooks go even further beyond that. However, these are still quite far from the UHD standard and Apple uses 1080P and upscale it for those displays. Although companies like Panasonic have already demonstrated UHD resolutions on higher end tablets – the real benefit in UHD lies in large living room displays. With a 10ft average living room watching distance, all but eagle eyed viewers will need a 60” or larger display to really make out the difference between UHD and FULL HD resolution content.

Personally, I’m one of the few who are really enthusiastic about UHD in the consumer space, from a picture quality standpoint. However, if we’re being realistic, I doubt we’ll be able to see streamed OTT content for it given the state of the industry and where it’s going: cheaper but smarter TVs. By the time 4K reaches its potential, in 1-2 years, there’s a very real chance that consumer interest would have already moved on to something else in the typical 21st century collective ADHD…

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What does matter?

HEVC, or H265 is a true boon for the OTT TV industry. Typically coupled with the 4K/UHD logo, this technology is typically mistaken as “only” an UHD enabler.

The ability to stream better content in less bandwidth means better looking content using the same bandwidth. Given that the average users’ bandwidth increases consistently worldwide plus the HEVC boost in picture quality gives OTT TV providers the push they needed past satellite and cable and gives them a great fighting chance. HEVC and transport technologies like Beemr or Zixi, push the image quality boundaries by utilizing existing bandwidth better, and lets OTT providers push the image quality envelopes that the open Internet provides.

So, people… HEVC  is not just good for UHD/4K (which isn’t coming to mass market any time soon), it’s good for the entire industry. In a year or two, when the 4K/UHD hubbub dies down, HEVC/H265 will easily be recognized as the single best achievement that 2013 had to offer for the OTT TV market.

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