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CE Manufacturers the Real Winners from 4K UHD
4K UHD Market Analysis and Commentary
29 Nov 2016 - Futuresource Consulting has published its latest 4K report highlighting industry momentum for the adoption of 4K Ultra High Definition (UHD). Consumer electronics manufacturers are rolling out a greater range of capable devices at mass market prices. However, the currently available consumer TV's and peripheral devices are only just scratching the surface of the potential benefits of 4K UHD. By the end of 2016, 5% of homes globally will have a 4K UHD TV, with 55 million sets sold throughout the year.
2016 has seen a range of progress for 4K UHD, depending on content delivery platforms. Most notable has been Ultra HD Blu-ray, with disc sales performing well since launch. Approximately 3 million discs are expected to be sold globally by the end of 2016, with the USA driving this, as retailer support has been particularly impressive.
"Broadcast is the most important sector when it comes to mobilising widespread adoption of new video technology," commented Tristan Veale, Market Analyst at Futuresource Consulting. "With broadcasters focusing heavily on the additional features of 4K UHD, services including such are expected to roll out in 2017, with many early adopters needing to purchase new sets to benefit properly from the ongoing quality improvements being made to content. This will naturally be great news for the CE manufacturers, which will see continued momentum of hardware sales." Upgrading to UHD is a significant investment, most broadcasters are only committing if they feel there is a solid business case for it, with increased broadcast acquisition costs, delivery costs, channel capacity and even satellite transponder space costs key considerations and potential barriers to mass market rollout.
The report details how Over-The-Top (OTT) 4K UHD delivered content has had a mixed year. Subscription video on demand services were early adopters of the new technology and ahead of the market with implementing additional features of High Dynamic Range (HDR) and Wider Colour Gamut (WCG). Although 4K UHD content is not necessarily a key driver of subscriber growth for these services, it does act as a churn reducer, and for Netflix it helps them upsell existing customers to its higher priced tier.
The availability of 4K UHD content on transactional digital video services is patchy, with few services pushing the content. The leading transactional online video service, Apple iTunes Store, is yet to commit to providing any 4K UHD content, whilst Apple TV does not feature 4K UHD capability. However, Futuresource expects 2017 to be a break out year, with major services adding this capability, supported by the continued drive towards improved broadband for households.
The report goes onto to highlight that it might take some time before technological advancements settle, with a keen early adopter potentially purchasing multiple iterations of 4K UHD TVs over time before they can fully enjoy an end-to-end, HDR, WCG, gold standard video experience from all potential video sources. Even after HDR and WCG, we will see the introduction of higher frame rates and enhanced audio. By the end of 2017, 24% of US households will have an Ultra HD TV. However, around 14% of households will have an HDR capable TV.
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Futuresource Consulting is a specialist research and knowledge-based consulting company, providing organisations with insight into consumer electronics, digital imaging, entertainment media, broadcast, storage media, education technology and IT. With a heritage stretching back to the 1980s, the company delivers in-depth analysis and forecasts on a global scale, advising on strategic positioning, market trends, competitive forces and technological developments. www.futuresource-consulting.com
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