4K TV imposes hurdles on telcos, broadcasters

As the holiday shopping season begins, shoppers in electronics stores might find their eye caught by a new type of television set—one that offers a more detailed, crisper and richer picture than its high-definition brethren. Companies such as Sony Corp. and Samsung Electronics Co. have released various versions of ultra HD, or 4K TVs, which have a resolution that’s about four times higher than regular high-definition sets (3,840 by 2,160 pixels as compared to 1,920 by 1,080 for “full” high definition), but adoption of the technology is still very much in its infancy. Barriers include high price tags, a lack of 4K content and the difference in resolution only being perceptible on bigger TV sets. Still, companies such as Sony and Netflix Inc. are betting on the success of the technology, and if they’re right, the shift will mean massive changes are in store for broadcasters, broadcast distributors and Internet providers. “Broadly speaking, from a network perspective, it would be essentially impossible for all Canadians to move all of their video consumption to 4K in the near future,” Duncan Stewart, director of technology, media and telecom at Deloitte Canada, said in a phone interview. Experts say content producers will have to upgrade all their equipment, while broadcast distributors will have to deal with cable and satellite systems that can’t fit as many 4K channels as they can regular channels. Internet providers, meanwhile, would have to make sure their networks can handle a massive surge in bandwidth usage. At the moment, though, we’re still in the “early days” of 4K in North America, Michael Inouye, a U.S.-based senior analyst at ABI Research, said in a telephone interview. “As far as content services, there’s very, very little right now,” he added. “YouTube allows some content up to 4K, but beyond that, there really hasn’t been much.” In September, Sony launched what it described as “the world's first and only” 4K video download service in the U.S., while in October, Netflix CEO Reed Hastings said in the company’s third-quarter earnings conference call that the company wants “to be one of the big suppliers of 4K content next year.” While some European and Asian broadcasters have launched trials, targeted at events like the Sochi Winter Olympics next year and the FIFA World Cup in Brazil, Inouye said, North American broadcasters haven’t launched anything similar. “They’ve been relatively tight-lipped,” Inouye said. A report from ABI last month predicted that in North America, 4K TV penetration is expected to reach five per cent of households by 2017 and 10 per cent by 2018. Inouye said it is around that point when broadcasters will really become interested. “Usually around that 10 per cent is when you start to see more of the pay-TV operators looking more into releasing content for it,” he said. But if broadcasters want to jump in and make a move to 4K content, they will have a lot of upgrading to do, said Deloitte’s Stewart. For TV studios to offer 4K content, they would have to buy all new equipment, he said. At nearly every point, he noted, “the gear that they have today, the HD gear they only bought eight years ago, doesn’t work on 4K.” “You therefore are required not merely to upgrade the camera, you are required to upgrade virtually every single high-end component along the broadcast path,” Stewart said. This would include equipment like cables, synchronizers and production routers. It would be an expensive endeavor, costing between $4 million and $10 million per channel, about the same cost as when channels upgraded from standard definition to high definition 10 years ago, he added. Despite the cost, it seems that such equipment is starting to sell. Stewart said a number of Canadian companies make high-end television gear, and if you went to their websites at this beginning of this year, “you couldn’t buy a 4K production router for love or money.” Now, they are not only making the 4K-compliant products, orders are coming from all over the world, “and they are not small numbers.” Broadcasters aren’t the only ones who would face challenges adapting to the technology. Broadcast distributors would have adjustments to make, too. One problem is because 4K has four times the pixels as standard HD, a 4K channel would take up as much room as four HD channels, Stewart said. Compression technology could reduce that to two or two-and-a-half times as much room, while a channel with a higher frame rate could increase that ratio to as much as eight to 10 times as much as regular HD channels. Gregory Taylor, a broadcasting expert and post-doctoral fellow at Ryerson University, said this would affect channels broadcasting over the air, cable and satellite. That makes any discussion about how this could affect broadcasting speculative, though the outcome will depend on high efficiency video coding (HEVC) technology, which hasn’t been used in a large-scale way yet. “Unless that proves very effective, they’re not going to be able to use this. Certainly not in the near future,” he said. “If you’re doing over-the-air, the amount of spectrum this would require would be beyond what any broadcaster is allocated in Canada or the U.S.” He added that since “there’s only so much room in a coaxial cable” the technology “poses real problems for transmission” of cable TV, and satellite transmission would face similar challenges. In areas with fibre-optic infrastructure, Stewart noted, “this turns into a non-problem.” And while an increasing number of Canadians are getting more of their television content online, Internet delivery would pose problems as well. The average Internet cap in Canada for uploads and downloads last year was 104.9 gigabytes in 2012, according to the CRTC’s most recent Communications Monitoring Report. Average usage is well below the average cap; in 2012, the average user downloaded 28.4 GB and uploaded 5.4 GB. When it comes to 4K content, that average cap would likely be insufficient. Downloading a movie on Sony’s 4K service takes up roughly 40 GB of bandwidth, said Ray Hartjen, senior manager of public relations at Sony, in an emailed statement. Streaming an hour of 4K content, such on a service like Netflix, would take up about seven GB an hour, Maclean’s magazine estimated in an article last month. “Data plans are a barrier for things like this, and data plans still exist,” Taylor said. Stewart said the average Canadian watches four hours of video content on their TV a day, a number that, at 40 GB for every two hours, would add up very quickly. It would take 25 movies to hit a terabyte of data used. Taylor added that “if, for example, this was also going to available wirelessly, if you want this level of resolution on your iPad or phone, what does that mean for spectrum access? There are huge questions on the widespread distribution of this that remain unanswered and that might, for the foreseeable future, still pose substantial roadblocks.” In the same way fibre might be the solution to 4K TV channels, it could be a solution to the bandwidth crunch as well, Taylor said. “If we all go to fibre-to-the-home, then we might have the possibility for something like this,” he said, noting that at the moment, very few customers have access to the technology. Stewart added that caps are rising, and those through fibre-to-the-home tend to be larger. “Fairly obviously, trying to stream all of this stuff will be a big bandwidth crunch, not just on the last mile, but probably on multiple parts of the network,” he said. While he outlined a number of barriers standing in the way of 4K, Stewart said he expects ultra-high-definition TVs to make inroads “quite a bit faster” than he would have predicted a year ago. “In January, I would have said that a significant penetration, whether it’s 10 or 20 , would have taken between five to seven years from 2013. We’ve now moved that number down … to three to five,” he said. Taylor said that “there is no guarantee that this is going to take off the way some advocates are claiming.” He said 4K is being driven by manufacturers as opposed to public demand, as the TV industry would like to keep the boom they experienced in the past 10 years, as customers switched to flat-screen HD TV. “Basically, this is, in my view, the product of the hardware industry looking at the phone industry with envy right now and wishing they could get turnover like the phone industry does.” — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

4K TV imposes hurdles on telcos, broadcasters

Broadcast | December 2, 2013

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4K TV imposes hurdles on telcos, broadcasters

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