This follows Part I of our IBC wrap-up, which addressed the launch and impact of OTT services on broadcasters and pay-TV providers. In particular, it highlighted concerns that traditional players have about Google, Facebook and Amazon, and their impact on the TV industry in the future. (See IBC 2016: The Last Word.)
In Part II, we'll primarily be addressing 4K UHD and virtual reality.
4K UHD was a major theme at this year's show, as you would expect. Speakers and delegates were quick to stress how TV penetration was ramping up and expectations were high, with forecasts suggesting that 100-140 million homes would have UHD TVs by 2020. But there wasn't much discussion on some key issues that 4K/UHD continues to face.
Firstly, consumer response to the higher resolution is fairly tepid below 55-60 inch screens. On smaller screens, the improvement over HD is not clear and has not rated highly. And while TV screen sizes are increasing, not everyone is going to view video on an 80-inch screen. However, the truth is that it probably doesn't matter. Once 4K UHD TVs reach a mass market price (and they have now) it makes more sense for manufacturers to just take HDTVs out of the process rather than have multiple production lines running. So when consumers go to buy a new TV, they will only have UHD TVs to choose from. This will add scale economies to the UHD line, and bring down the price further.
HDR coupled with 4K UHD has reportedly tested far better with consumers. Even on smaller screens, the impact of HDR on the consumer experience is powerful. However, there are multiple HDR standards in the market and this may be delaying the deployment of HDR technology.(See Hurdles Ahead for 4K, HDR.)
Another major issue for HDR is backwards compatibility. Even early adopters of 4K UHD TVs only bought them recently, and at fairly high prices. They will not be amused to find that within two years better technology has emerged, and they now need a new TV to enjoy it. Technicolor (Euronext Paris: TCH; NYSE: TCH) and
Royal Philips Electronics N.V. (NYSE: PHG; Amsterdam: PHI) have proposed a new standard aimed at backwards compatibility, but it adds to the existing ones from Dolby Laboratories Inc. (NYSE: DLB) and the open HDR 10 standard.
HDR is also directly related to other UHD enhancements such as wide color gamut, while technologies such as higher frame rates and 3D object based audio will also add to the UHD experience, and some argue should also be added to any new UHD specification.
In addition, we also have the obvious bandwidth challenge created by delivering four times the resolution of HD, and the limited volumes of 4K content that exist today. The latter is being addressed gradually with an increasing quantity now being produced in 4K or higher, and cinematic content being adapted for 4K TV. There are 57 4K UHD channels offered worldwide, according to SES S.A. (Paris: SESG), and a steady stream of launches planned in coming years. Still, it will take time for a sizeable selection of 4K UHD channels to become widely available.
But there was a sense of inevitability to 4K/UHD conversations at the show. Some recognized there would be problems and challenges, but the sense was that the train had left the station; 4K UHD is on its way to your home if it hasn't got there already. And everyone involved, including pay-TV providers, had better prepare for it.
One positive development for the progress of UHD TV is the UHD Alliance premium UHD certification program. The group has created a broad set of performance specifications for displays and packaged media (Blu-ray DVDs) to ensure that compliant products meet the threshold of UHD customer experience that they have determined. Certified products feature the Premium UHD logo.
The UHD Alliance certification includes a minimum HDR 10 compatibility to meet its requirements, which will also help with the HDR debate. The alliance has grown to 50 members across the video value chain, including the major movie studios, consumer electronics manufacturers, TV technology companies, pay-TV providers etc., and has certified more than 2,000 UHD products to date. It is now working to add a similar certification program for broadcast content and mobile devices.
Virtual reality and augmented reality (VR/AR) were also important topics at the event. The show floor featured a VR Theatre and VR Zone this year, allowing attendees to experience the technology. But the sense of inevitability around UHD didn't match the thinking on VR. Burned by 3D TV, everyone in the value chain is more wary about projections for VR even though there is clearly tremendous excitement about its potential. There are concerns about the visual quality and latency, and a recognition that it must be improved. Facebook is using a different "polygon mapping" approach to distribute VR content, but its priority right now is mobile usage, not TV. Harmonic Inc. (Nasdaq: HLIT) discussed a new tile-based approach which reduced bandwidth requirements from 10-15 Mbit/sec to 6-10 Mbit/sec and improved video quality.
Most discussions are still centerd on the actual video being a 3D experience, rather than using VR to enhance the video experience through navigation (as com hem AB is trying) or creating a virtual theater. I suspect these approaches are more practical in the short term. (See Com Hem Stakes Virtual Claim.)
Some attendees also expressed concerns about the requirement of a VR headset. I was told frequently that they have come down in price but they are still expensive. Even if the price is right, additional CPE poses additional challenges. How many should you have in a home? What if you have visitors -- should you have guest headsets? How comfortable are people wearing them? There are stories of people feeling claustrophobic and/or nauseous. From the commentary I heard as well, it just seems like VR has a way to go before the industry really figures out how to best use it, in spite of all the enthusiasm.
Still, there's a considerable amount of money going into the sector, with Deloitte Global reporting that 2016 would be the first billion-dollar year for VR investment.
IBC also hosts a closed-door meeting focused on big picture issues for senior executives titled the IBC Leaders Summit. This year, it featured executives from Vodafone Germany , Spotify , Liberty Global Inc. (Nasdaq: LBTY), the European Broadcasting Union (EBU) and Sky , among others. It also featured data gathered by IBM Global Business Services who pointed out that the telephone took 75 years to reach 50 million users, Facebook took 3.5 years and Pokemon Go took 19 days. The summit concluded that the pace of innovation was constantly accelerating and that "the industry would never change this slowly again."
Other pithy quotes came from advertising heavyweight Sir Martin Sorrell, who also felt that the Google, Facebook and Amazon were the biggest threat, though he heavily favored Amazon and other e-commerce companies such as Alibaba Group and Tencent Inc. He felt that Google and Facebook were not sufficiently transparent with ad impact measurement, arguing that they can't be both "players and referees" (by being both the media company and the technology that measures its performance).
Ang Lee, director of the films Life of Pi and Crouching Tiger, Hidden Dragon talked about his upcoming film, Billy Lynn's Long Halftime Walk, which is in 4K and 3D. It's also shot in 120 frames per second, which is the highest frame rate ever used for a film. He said that the "new technology would upgrade film-making in terms of storytelling."
Lastly, NASA accepted an award at the event and launched a 4K UHD channel that shows various images from space. I'm told it is out of this world.
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation