Extreme Reach leaderboard - 11-8-20
  • Once Again, the Main Focus at CES Will Be On Ultra High-Def TVs, But Will the Results Be Any Different?

    Judging by the pre-show buzz, the main focus at this year's CES (which kicks off next Tuesday) will be on Ultra High-Definition TV, or "4K" TV. If this seems familiar, it's because UHDTVs were the main focus of last year's CES as well. Clearly TV manufacturers have settled on UHDTV as the next "big thing" to motivate consumers to upgrade. However, in 2013, UHDTV's high prices, impractically large screen sizes and lack of 4K content led to extremely limited adoption in the U.S. So the question is: will UHDTVs find better success in the U.S. in 2014?

    The good news for UHDTV is that prices and sizes seem to be trending in the right direction. For example, on Amazon, you can currently buy a new 55-inch Samsung UN55F9000 UHDTV for $3K. That's just $800 more than the $2,200 UN55B6000 1080p model with comparable 120 Hz refresh rate. The price gap closes further if you're willing to buy refurbished; Amazon is offering the 55-inch model for $2,500 from Buy Squad. As the WSJ reported yesterday, tier 2 Chinese TV brands are creating massive pressure on tier 1 brands to reduce prices and it appears to be working.

    Still, TVs don't sell themselves, as always it's the content that motivates purchase. And the type of content that motivates best is of course sports. But judging by recent comments from Chuck Pagano, the CTO of ESPN, the 800-pound gorilla of TV sports, UHDTV is still a relatively low priority. Importantly, Pagano notes that it's not just about the TVs and 4K cameras (which are also becoming more affordable), it's about other things falling in place like codecs, switchers, graphics engines, HDMI standards and other "plumbing." He doesn't see the pieces falling together until at least 2015. No doubt given ESPN's failure with 3D, it will be more conservative with UHDTV.

    But more troublesome is Pagano's concern that at the 55-inch screen size, viewers may have trouble even noticing the quality difference between 4K and today's HDTV. This reinforces the rationale for UHDTV's original massive sizes - these were required to make the picture quality difference obvious. Since most homes can't accommodate a 100-inch UHDTV (or the accompanying cost), this is a non-starter. Hence UHDTV's catch-22: screen sizes must be smaller to be practical, but the result is a loss of the picture quality differential.

    Somewhat unexpectedly, these days, it's the OTT crowd that seems to be leading the charge on 4K content. Netflix has said it will stream the upcoming second season of "House of Cards" in 4K to certain devices/UHDTVs. Amazon plans to shoot its original series in 4K. And just yesterday, YouTube said it is embracing 4K, but with the VP9 codec, rather than the HEVC codec which has been widely considered the 4K standard. This will surely create more confusion for the 4K ecosystem.  Even with OTT providers adopting 4K, it seems unlikely to be enough to spur consumers to pay up for UHDTVs.

    In fact, there's a far larger, nagging problem with UHDTV: many U.S. homes have purchased large-screen HDTVs in just the past 5 years. Given their very strong picture quality, and that an inexpensive connected TV device enables them with OTT content, the motivation to upgrade is muted. This is partially why IHS forecasts 2013 will be the second consecutive year of declines in TV shipments. More broadly, for many consumers today, having their TV integrated with their other devices, is the top priority (hello, Apple?).  

    Add it all up and it's hard to envision significant adoption of UHDTVs in the U.S. in 2014. In the very long term UHDTV will likely succeed, but its adoption will be far slower than HDTV's was.

  • Extreme Reach full banner - 11-8-20