nScreenMedia OTT multiscreen media analysis

The immediate future of UltraHD is streaming

SVOD and Disc sales revenue US 2013-2016

Broadcaster foot-dragging and falling disc sales mean streaming will remain the primary way people watch UltraHD video content through 2020. That said, people will still watch 34 times more HD than UHD in 2020.

UHD will not save disc sales

Though UHD players remain very expensive, discs are apparently selling well. The millionth UHD Blu-ray disc was sold in October 2016, and there were 72 titles available at the time. However, the long-term trajectory of disc sales is down. Total video disc sales have fallen from $7.8B in 2013 to $5.5B in 2016. Disc share of home entertainment spending has fallen from 43% in 2013, 30% in 2016.

Where has that money gone? Consumers are swapping ownership for access to big video libraries. SVOD revenue between 2013 and 2016 almost doubled to $6.2B.

Broadcasters, pay TV going slow

Japan is the only country with a firm timetable for conversion to UltraHD broadcasts. Masayuki Suga, Deputy Director, Ministry of Internal Affairs and Communications in Japan, says broadcasts will have completely switched to UHD by 2025. One of the key driving factors in Japan, however, is the 2020 summer Olympics.

Other countries, including the U.S. are just dipping their toe into the UHD waters. For example, DirecTV did the first live broadcast, of The Masters, in UHD last year. I’ll will double its 4K coverage of that event this year.

There is no timetable in the U.S. for the rollout of ATSC 3.0, which includes UHD support. Major cable companies prefer to deliver UHD over broadband. They have not articulated plans to support UHD in their traditional cable delivery plant.

Broadband reach of 25Mbps improving

Meanwhile, broadband speeds are increasing across the globe. Akamai reports that 10% of broadband connections in Q4 2016 were at or above 25Mbps. That’s a 40% year-over-year increase. 25Mbps is the recommended speed by Netflix to watch its UltraHD content.

In the U.S., a third of connections in Washington D.C. are above 25Mbps. Ten States have 20% or more of connection above 25Mbps.

One problem could be broadband caps. Comcast and AT&T both have 1TByte monthly caps on their broadband plans. 1TByte will allow about 125 hours of UHD streaming.* The average person watches about that much TV in a month. Given there are 2.6 people per home in the U.S., people simply won’t be able to watch all their video in UHD.

4KUHD-Comparison_Infographic-CTAUHD TV sales are strong

CTA says by the end of 2016, 19M UHD TVs had shipped in the U.S. What’s more sales are growing much faster than when HD TVs first rolled out. For example, in the third year after HD launch (2003), 2.3M HD TV were shipped. In the third year of UHD TVs (2016), 10M sets where shipped.

Worldwide, IHS forecasts that UHD TV shipments will reach 120M by 2020. 30M of those sets will be high dynamic range (HDR) capable.

UHD Share of Internet VideoUHD streaming solid, not dominant, in 2020

Cisco forecasts that 79% (or 128 Exabytes a month) of worldwide Internet traffic will be video in 2020. Of that, 67% will in HD quality, and 16% will be UltraHD. That translate to about 85 Exahours a month of HD content, and 2.5 Exahours of UltraHD. In other words, on average people will stream 34 times more HD than UHD in 2020.

Why it matters

Streaming will remain the primary way people enjoy UHD through at least 2020.

Strong UHD TV set sales and many more 25Mbps broadband connections mean the number of people able to watch UHD will expand fast.

That said, people will still mostly watch HD video in 2020.

*UHD streaming consumes about 8Gbytes an hour.


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