Author: Gabriel Dusil

• Gabriel is a seasoned sales and marketing expert with over twenty years of experience in senior level positions at companies such as Motorola, VeriSign (part of Symantec), and SecureWorks (part of Dell). His strengths lie in international business development and strategic partnerships, as well as the unique ability to translate complex ideas and technologies into language that decision makers can easily understand. Gabriel has a Bachelor’s degree in Engineering Physics from the University of McMaster in Canada and possesses expert knowledge in cloud computing, IT security and video streaming technologies (Over the Top Content, OTT). Gabriel also runs his own company, Euro Tech Startups, and manages two blogs: https://mykoddi.com/dusilcom/ and https://gabrieldusil.com/

OTT & Multiscreen • Digital Video Series • 7 • Are You Ready For Social TV?

2013 August 12 / Gabriel Dusil / 16 Comments

Graphic - Are You Ready For Social TV (title, web)

The broadcast market is facing the most significant paradigm shift in history, with traditional linear television struggling to meet the demands of an emerging multiscreen audience. Any broadcaster that has not yet implemented a TV-PC-Tablet-Smartphone strategy, and is still managing its operations with linear tape-based workflows is missing out on a massive audience – a demographic of mobile video subscribers – a group that is growing at a faster pace than in any previous technology in history. This change is driven by a desire not only to consume media on multiple devices, but to interact with this content across social, geographic, and cultural boundaries.

Figure i – Global Forecast of PC, Smartphone and Tablet to 2016

Top tier broadcasters are not oblivious to the multiscreen movement. It could even be argued that they have led the evolution; from switching off analogue services by 2015[1], to upgrading their back-end systems to file-based workflow, high definition, and IP[2] delivery[3] (Figure iii). At any rate, entertainment industry leaders have been taken by surprise, due to the speed of technology adoption of these new market entrants. Telcos, internet providers, enterprises and innovative start-ups are positioning themselves as online video service providers – all vying for market attention. While broadcasters struggle to realign their business and operational strategies, those pushing the TV experience out of the traditional living room, and into the new social media marketplace, have driven this momentum.

Figure ii – Global Installed Base of Connected TV Devices

While television’s grip on the household remains strong, its dominance is diminishing as audiences utilize connected and interactive consumer electronics. Video is now detached from the sofa, and has gone mobile. Market research by Business Insider™[4] reports shipments of smartphones already surpassing PC sales. Tablets and other internet connected devices are expected to surpass PC sales beyond 2016 (Figure i). But it’s not only smartphones and tablets. As more and more device manufacturers seek out new revenue streams, connected internet devices now include media streamers, game consoles, set top boxes (STBs) and Blu-Ray players. Topping this list are connected TV’s, which are expected to take nearly 50% market share by 2016, according to Informa[5]. (Figure ii). Traditional broadcasters that only focus on the living room will inevitably see their subscribers moving to competing services with enhanced multiscreen capabilities.

Some industry insiders are anticipating the fate of television to that of the desktop computer. It is more likely, however, that consumers will simply enjoy new ways to view their video, and share those experiences with others. Social TV is about interaction. Television is no longer a monologue to a broad audience. It is now a one-to-one dialog with known subscribers.. According to Nielsen™[6], mobile devices are increasingly being used for social networking, product research, and shopping (Figure iv). In a Social TV context, the television is no longer just a passive monitor in the living room, but an interactive and personalized screen. On a basic level Social TV enables:

Second screen interactions with friends and family
Sharing comments, ‘likes’, ratings, criticisms, and recommendations
Discussions on a film or series story-line, their actors, writers and directors
Tweeting reactions to a live news broadcast, or posting opinions onto Facebook
Integrating consumer behavior and demographics into viewing patterns and targeted advertising
Voting, trivia and sweepstakes in real-time

Broadcasters are aware of these subtleties, however, despite changes in consumer behavior, many are still struggling with how to secure their position in the Social TV era. With the focus of entertainment consumption on any device, anywhere, and at any time, what are the expectations for Social TV? How should broadcasters position themselves in this new space and remain competitive? The remainder of this paper will explore some of the challenges that the entertainment industry faces in the Social TV era, and explore strategic principles necessary to remain competitive.

Figure iii – Top Trends for the Global Broadcast Industry

Social TV Challenges

An effective Social TV strategy calls for more than simply delivering content from a strategic brand. It’s about the user experience. The global proliferation of mobile devices is changing the very nature of content consumption. The growth of streaming video is forcing broadcasters to develop innovative strategies to protect their installed base.

The first challenge is in the development of applications for social media engagement across a wide range of devices. Apps are the digital bridges between entertainment and computing. Traversing this path is no easy task for broadcasters that are struggling to familiarize themselves with the world of software.

From a delivery perspective, there are challenges in reaching a mobile audience. Two such hurdles are the lack of feature-rich smartphones and mobile bandwidth, for live video streaming in some markets. Moving content to the cloud enhances the experience for some subscribers, but cloud coverage is still sparse in many regions beyond the USA, Europe, and Asia. The majority of global subscribers do not have access to high mobile speeds which leads to reliance on costly Content Delivery Networks (CDN) to provide effective local streaming.

From an operations perspective, the publication of online and mobile content is often labor-intensive and disconnected from traditional broadcast workflows. In many organizations the preparation of online content, transcoding, adding metadata, and reformatting of content to suit various mobile devices is still a manual process. This fragmented workflow from content creation through to consumer consumption, means that broadcasters often lack the agility to rapidly respond to changes in subscriber behavior, or the need to quickly deliver content from one end to the other (i.e. content creation to consumption).

Financially, broadcasters are facing greater competition than ever before. They are losing audiences not only to streamlined multiscreen content providers but also to online service providers that are leap-frogging the traditional distribution model and reaching their subscribers directly. These new “Over the Top” (OTT) content providers completely bypass traditional programming by connecting TV’s directly to the Internet. Subscribers are reviewing their monthly bills, and asking themselves why they should stay with their Pay TV provider when they can have a lower cost internet video services instead? – A service that supports multiple devices, and provides exciting social interaction. Such questions have led to some consumers “cutting-the-cord” to their Pay TV service.

Finally, changing the mindset from a content-centric to an experience-centric ideology is a major challenge for traditional broadcasters. Entertainment is not just about content – it is an immersive experience. Content must provide a total experience for consumers to enjoy it (and pay for it!). An extremely important component of this development is the User Interface (UI) and the User Experience (UX). Content itself is still central to the buying behavior of subscribers, but UI/UX is essential to its sale. The consumption of content has changed because content that was once languishing on tape, in storage, can now be readily available online. Subscribers no longer have to wait for a designated broadcast slot to watch a movie on their TV. They can watch that movie anytime, anywhere, and on any device. The differentiator is now the environment in which that content is consumed. There is greater competition for grabbing the attention of consumers: Internet video, social networking, mobile apps, gaming, search & discovery all form the architecture of an exciting UI/UX application.

In this fast moving entertainment landscape consumers need to be sheltered from technological complexity. Apple’s iPhone is an excellent example of complex technology hidden behind a wonderful UI/UX. An elegant front-end experience should mask the complex workflow or processing that is needed to ensure an enriched end-user experience. Maximizing revenue is about a boundless and untethered consumption of content in an environment where the residents wants to stay and play.

Nimble content providers are solidifying themselves as viable competitors in an increasingly tech-savvy and discerning audience simply by providing a superior environment. Broadcasters initially dismissed these providers as viable competitors, but they have since emerge over the past decade as formidable players. Subscribers now have more choice in how they view, consume, and react to content. To paraphrase a popular saying, it’s not just that Content is King, it’s how the viewer enjoys their trip to the Kingdom, and has fun during their stay. This is the essence of an exceptional user experience.

Figure iv – Mobile Device Activity While Watching TV

A Business Case for Social TV

The one-to-one relationship of Social TV enables a more personal relationship with consumers, for better or worse. Putting privacy issues aside, the audience is no longer an anonymous group of faceless subscribers. Each consumer can be treated individually in an ecosystem of content, advertising, and common interest.

Content Monetization

The three most common forms of content monetization include; revenue based on advertising (the basis of broadcast television for over 60 years); transactional model (used in Video On Demand purchase and rental services); and a subscription model (popular with cable and satellite Pay TV services). Developing compelling services that reduce client churn is one of the main challenges today. Extended offerings out of the living room and into an untethered mobile lifestyle leverages this growing multi-platform user base. Providers will need to find a balance between premium and ‘freemium’ content. YouTube is already dispelling the myth that freemium is not a viable business model. After all, when a YouTube channel has over one million followers, new doors are opened to monetize content using social media and other interactive means.
For owners of entertainment assets; system requirements include the monetization of content via a balanced combination of ads, subscriptions, or transactions; the ability to adapt quickly to new and evolving consumer behavior; quick implementation of new campaigns; integration with multiple social networks; portable and untethered content rights protection. Service providers also need the ability to integrate new technology without significantly disrupting their current best practices. Realizing a Social TV solution strategy requires putting the consumer at the center, where previously content held pride of place.

Advertising Revenue

Figure v – Ad Spending by Consumer Time & Media Type, ‘11

Social TV allows broadcasters to expand online advertising revenue streams. Recent reports estimate global internet ad revenue worth 36.5 billion US$[8] in 2012. An increase of 15% from the previous year. The time spent on viewing online media is growing, thanks to mobility, however advertisers are currently playing catch-up. According to eMarketer™, online ad spending is expected to reach 50 billion US$ in 2015[9].
Correlating advertisement spending against consumer time reveals an interesting disparity in how dollars are being spent. According to a study by Business Insider Intelligence™[10] consumers are spending much less time on print publications compared to advertising spend (Figure v). Conversely, mobile advertising is being under-utilized when compared to subscriber’s time spent on mobile devices. Advertisers will need to address this disparity if they are to capitalize on Social TV trends.

Audience Engagement

Real-time Audience engagement not only builds brand loyalty but offers opportunities for revenue generation. Personalized interactions via comments, voting, chats and sharing on global social networks are being used to build behavioral profiles within CRM (Client Relationship Management). Integration with social media allows almost unlimited growth of ‘friends’, or ‘followers’ as a route to expanded viewership. Adding mobility adds a new dimension, which expands both the hours spent with media, and their engagement with advertisers.

For the subscriber; an appealing user-experience (UX) enables content feedback. Shared experiences translate to suggestions and recommendations. Content delivery should work cross-devices and operating systems – even when switching between devices in mid-view. Consumers want content that has no geographical limitations and where digital rights do not spoil their enjoyment.

Social TV Revenue Generation

Broadcasters are well positioned to generate revenue from Social TV by extending their existing business models. It is essential for the entertainment industry to realize the value of correlating content within the context of an interactive community, putting subscribers at the focal point of the entertainment value chain.

In the linear television era, reports that measured audience behavior (such as they were) came back late, had statistical errors, and there were always concerns that the sample chosen, didn’t quite represent the overall audience. Advertising in social media is about understanding the viewer – not as a group, but as individuals. Technology now allows for targeted advertising to individual subscribers – something traditional television has never been able to achieve – this is done in real-time and at a granular scale. Advertising dollars are otherwise wasted when commercials or banner advertisements are displayed in the wrong geography, on the wrong web page, or even to the wrong consumer. Advertising on a personal level becomes relevant and more valuable through the correlation of socio-demographic[11], geolocation[12], and historical behavior analytics[13].

Real-time analytics and statistics are vital tools in understanding the success or failure of a campaign. Marketing success is generally measured by the ratio between leads generated in a campaign to the number of prospects which have actually bought the product. Online campaigns are typically measured by CPM[14] (Cost per Impression), CPV[15] (Cost per View), PPC[16] (Pay per Click), and CPA[17] (Cost per Action). Beyond these metrics, advertisements that are geo-location sensitive, ensuring they are “in-view”, and that the correct brand is served with the website’s content, are important to ensure that prospects, web-content and ads are all correctly associated.

Another feature to take into account is the increasing tendency to interact with multiple devices simultaneously. The youth segment is often using the smart phone as their 2^nd screen. Adults find themselves using their tablets as they relax on the sofa, or in bed, for an evening of television. Regardless of age, subscribers interact, comment, and critique their entertainment in real-time. This simultaneous consumption of entertainment while communicating with remotely displaced friends, family and followers is part of today’s Social TV ecosystem.

Understanding the behavior of end-users is essential to a modern marketing and sales strategy. A recent report from Forrester Research™ shows an overwhelming influence of social media on the consumption of video, audio, images and documents[18] (Figure vi). The influence of peer suggestions drive subscribers to fresh videos, music, blogs, and podcasts – content that would be otherwise undiscovered using traditional means. And video leads the pack for internet-based consumption. It’s also worth noting from this study, that there is little disparity between European and North American consumer behavior.

How subscribers interact with multiscreen devices (TV, PC, tablet or smartphone), whether sequentially or in parallel opens new revenue generating opportunities for content owners:

Commercials providing additional product information to support their product, eg .the TV show Top Gear’s[19] road test review coinciding with a car commercial.
Sports broadcasts offering additional statistics related to a live event, or behind the scenes footage of a favorite player.
Reality and game shows – See who your friend’s voted for. Play on a 2^nd screen game for additional prizes, or enter a sweepstakes.
Education – provide supplementary videos or reference materials to support educational content. Push relevant content to students during a live lecture.
Shopping – check if your friends, family or followers liked the product before deciding to buy
Film – receive additional scene details, camera angles, or plot clues, while watching a movie[20]

As subscribers become more engaged within these environments, revenue opportunities have the potential to increase proportionally.

Figure vi – How Subscribers Consumer Internet Content

In summary, competition is growing for traditional providers of entertainment. With new entrants competing for market share, broadcasters require changes in corporate culture to adapt to a changing market landscape. Consumers are getting smarter how they want their entertainment. They are also becoming more demanding. What was considered a revolutionary technological breakthrough yesterday, quickly becomes today’s norm. Social TV provides the industry with a real-time forum for reacting to entertainment. Traditional television could never achieve that level of granularity in measuring audience behavior, be it comments, criticism, ratings, voting, or suggestions, Social TV brings a new level of real-time response back to the entertainment industry.

Read Additional Articles in this Series

I. Consumption is Personal

https://mykoddi.com/dusilcom/2013/02/28/consumption-is-personal/

In the days of linear television, broadcasters had a difficult task in understanding their audience. Without a direct broadcasting and feedback mechanism like the Internet, gauging subscriber behavior was slow. Today, online video providers have the ability to conduct a one-to-one conversation with their audience. Viewing habits of consumers will continue to rapidly change in the next ten years. This will require changes in advertising expenditure and tactics.

II. Granularity of Choice

https://mykoddi.com/dusilcom/2013/04/01/granularity-of-choice/

The evolution from traditional TV viewing to online video has been swift. This has significantly disrupted disc sales such as DVD and Blu-Ray, as well as cable and satellite TV subscriptions. With the newfound ability to consume content anytime, anywhere, and on any device, consumers are re-evaluating their spending habits. In this paper we will discuss these changes in buying behavior, and identify the turning point of these changes.

III. Benchmarking the H.265 Video Experience

https://mykoddi.com/dusilcom/2013/04/22/benchmarking-the-video-experience/

Transcoding large video libraries is a time consuming and expensive process. Maintaining consistency in video quality helps to ensure that storage costs and bandwidth are used efficiently. It is also important for video administrators to understand the types of devices receiving the video so that subscribers can enjoy an optimal viewing experience. This paper discusses the differences in quality in popular video codecs, including the recently ratified H.265 specification.

IV. Search & Discovery Is a Journey, not a Destination

https://mykoddi.com/dusilcom/2013/05/13/Search-and-Discovery-Is-a-Journey-not-a-Destination/

Television subscribers have come a long way from the days of channel hopping. The arduous days of struggling to find something entertaining to watch are now behind us. As consumers look to the future, the ability to search for related interests and discover new interests is now established as common practice. This paper discusses the challenges that search and discovery engines face in refining their services in order to serve a truly global audience.

V. Multiscreen Solutions for the Digital Generation

https://mykoddi.com/dusilcom/2013/06/24/multiscreen-solutions-for-the-digital-generation/

Broadcasting, as a whole, is becoming less about big powerful hardware and more about software and services. As these players move to online video services, subscribers will benefit from the breadth of content they will provide to subscribers. As the world’s video content moves online, solution providers will contribute to the success of Internet video deployments. Support for future technologies such as 4K video, advancements in behavioral analytics, and accompanying processing and networking demands will follow. Migration to a multiscreen world requires thought leadership and forward-thinking partnerships to help clients keep pace with the rapid march of technology. This paper explores the challenges that solution providers will face in assisting curators of content to address their subscriber’s needs and changing market demands.

VI. Building a Case for 4K, Ultra High Definition Video

https://mykoddi.com/dusilcom/2013/07/15/building-a-case-for-4K-ultra-high-definition-video/

Ultra High Definition technology (UHD), or 4K, is the latest focus in the ecosystem of video consumption. For most consumers this advanced technology is considered out of their reach, if at all necessary. In actual fact, 4K is right around the corner and will be on consumer wish lists by the end of this decade. From movies filmed in 4K, to archive titles scanned in UHD, there is a tremendous library of content waiting to be released. Furthermore, today’s infrastructure is evolving and converging to meet the demands of 4K, including Internet bandwidth speeds, processing power, connectivity standards, and screen resolutions. This paper explores the next generation in video consumption and how 4K will stimulate the entertainment industry.

VII. Are You Ready For Social TV?

https://mykoddi.com/dusilcom/2013/08/12/are-you-ready-for-social-tv/

Social TV brings viewers to content via effective brand management and social networking. Users recommend content as they consume it, consumers actively follow what others are watching, and trends drive viewers to subject matters of related interests. The integration of Facebook, Twitter, Tumblr and other social networks has become a natural part of program creation and the engagement of the viewing community. Social networks create an environment where broadcasters have unlimited power to work with niche groups without geographic limits. The only limitations are those dictated by content owners and their associated content rights, as well as those entrenched in corporate culture who are preventing broadcasters from evolving into a New Media world.

VIII. Turning Piratez into Consumers

IX. Turning Piratez into Consumers, I

https://mykoddi.com/dusilcom/2013/10/25/turning-piratez-into-consumers-i/

IX. Turning Piratez into Consumers, II

https://mykoddi.com/dusilcom/2014/07/15/turning-piratez-into-consumers-ii/

Content Protection is a risk-to-cost balance. At the moment, the cost of piracy is low and the risk is low. There are no silver bullets to solving piracy, but steps can be taken to reduce levels to something more acceptable. It is untrue that everyone who pirates would be unwilling to buy the product legally. It is equally evident that every pirated copy does not represent a lost sale. If the risk is too high and the cost is set correctly, then fewer people will steal content. This paper explores how piracy has evolved over the past decades, and investigates issues surrounding copyright infringement in the entertainment industry.

About the Author

Gabriel Dusil was recently the Chief Marketing & Corporate Strategy Officer at Visual Unity, with a mandate to advance the company’s portfolio into next generation solutions and expand the company’s global presence. Before joining Visual Unity, Gabriel was the VP of Sales & Marketing at Cognitive Security, and Director of Alliances at SecureWorks, responsible for partners in Europe, Middle East, and Africa (EMEA). Previously, Gabriel worked at VeriSign & Motorola in a combination of senior marketing & sales roles. Gabriel obtained a degree in Engineering Physics from McMaster University, in Canada and has advanced knowledge in Online Video Solutions, Cloud Computing, Security as a Service (SaaS), Identity & Access Management (IAM), and Managed Security Services (MSS).

All Rights Reserved

©2013, All information in this document is the sole ownership of the author. This document and any of its parts should not be copied, stored in the document system or transferred in any way including, but not limited to electronic, mechanical, photographs, or any other record, or otherwise published or provided to the third party without previous express written consent of the author. Certain terms used in this document could be registered trademarks or business trademarks, which are in sole ownership of its owners.

Tags

Broadcast, CDN, Connected TV, Content Delivery Networks, Cost per Action, Cost per Impression, Cost per View, CPA, CPM, CPV, Digital Video, entertainment industry, Gabriel Dusil, Internet Video, Linear Broadcast, Monetization, Multi-screen, Multiscreen, New Media, Nielsen, Online Video, Online Video Platform, OTT, Over the Top Content, Pay-per-click, PPC, Smart TV, Social TV, Television, TV, Visual Unity

References

[1] Geneva 2006 Agreement signaled the international mandate to turn of analog broadcasting by 2015, http://www.nettvett.no/ikbViewer/Content/Jan-Doeven-CEPT.pdf?documentID=50378

[2] Internet Protocol

[3] “BBS Broadcast Industry Global Trend Index: 2010 – 2012”, Devoncroft, http://blog.devoncroft.com/2012/04/05/largest-ever-study-of-broadcast-market-reveals-top-industry-trends-of-2012/

[4] Business Insider, http://www.businessinsider.com/

[5] Informa Telecoms & Media – Global Installed Base of Connected TV Devices ’11-16

[6] Nielsen, http://www.nielsen.com/us/en.html

[7] “some 40% of consumers are using social media while watching TV, talking and reading about the shows and movies on the big screen. This number is as high as 74% when looking at consumers with a broadband connection, according to Ovum”, OTT Goes Global – Worldwide Survey of Over-The-Top Video Services Report, http://www.researchandmarkets.com/reports/2059220/ott_goes_global_a_worldwide_survey_of

[8] IAB Internet Advertising Revenue Report, 2012, http://www.iab.net/media/file/IAB_Webinar_PWC_Presentation_FY2012_April_16_2013.pdf

[9] “eMarketer: Online Ad Spending Expected to Accelerate This Year To $31 Billion”, by Erick Schonfeld, Tech Crunch, http://techcrunch.com/2011/06/08/online-ad-spending-31-billion/

[10] Business Insider Intelligence, intelligence.businessinsider.com/

[11] Demographics, Wikipedia, http://en.wikipedia.org/wiki/Demographics

[12] Geolocation, Wikipedia, http://en.wikipedia.org/wiki/Geolocation

[13] Applied behavior analysis, Wikipedia, http://en.wikipedia.org/wiki/Applied_behavior_analysis

[14] CPM, Cost per impression. A measurement of how many times an advertisement is displayed, Wikipedia, http://en.wikipedia.org/wiki/Cost_per_impression

[15] CPV, Cost per View. Considered a more accurate representation of success from CPM as it measures how many times an advertisement is displayed and in view. Wikipedia, http://en.wikipedia.org/wiki/Online_advertising

[16] PPC, Pay per click. The total number of ad clicks that bring the prospect to your web-site. Wikipedia, http://en.wikipedia.org/wiki/Pay_per_click

[17] CPA, Cost Per Action. For example, a payment is made only when a prospects successfully clicks to buy a product. Wikipedia, http://en.wikipedia.org/wiki/Cost_per_action

[18] Forrester – Boost Your Content Ecosystem With Video (12.May). This study used a base sample of 16,473 online European adults (18+) & 57,924 online US adults (18+) http://www.forrester.com/Boost+Your+Content+Ecosystem+With+Video/fulltext/-/E-RES61457

[19] Top Gear, http://www.topgear.com/

[20] Second Screen Experiences Will Change The Way We Watch Films, by Nestor Bailly, PSFK, 25^th July 2013, http://iq.intel.com/iq/36323410/how-second-screen-experiences-will-change-the-way-we-watch-films?goback=%2Egde_2188349_member_261253203

OTT & Multiscreen • Digital Video Series • 6 • Building a Case for 4K, Ultra High Definition Video

2013 July 15 / Gabriel Dusil / 15 Comments

I Want My 4K MTV!

The future of digital video is expanding in all directions; from the size of the living room TV, to the depth of content selection, and to the different types of devices which serve content. A culmination of technologies is brewing that is bringing an IMAX-esque[1] experience to the living room. It is not difficult to imagine that in the next ten years subscribers will be unraveling and gluing their TV’s onto their wall. A culmination of the following innovations will make this happen:

Televisions are growing to the size of an entire wall. Several 100” television sets (2.5 meter diagonal) have been introduced to the market over the years, and prototypes of even larger screens have also been showcased. As screen sizes continue to increase, the only limiting factor will be the available wall space.
Displays are verging on the thinness of credit cards, thanks to technology such as OLED[2]. Organic Light-emitting Diode, displays have been recently introduced in 2013 as thin as 4mm[3] by LG[4]. Although OLED had a slow start due to high manufacturing costs and other technical issues, it still offers a promising future for ultra-thin and ultra-high resolution displays. Namely due to the fact that each pixel is self-emissive (i.e. they emit light without requiring a back-lit layer). As screens become thinner, this leads to the inevitable availability of…
Flexible displays[5]. These have also been announced from manufacturers such as Sony[6], Samsung[7], as well as display technology manufacturer, Corning[8].
Higher resolutions are now being introduced to the market such as 4K[9] (aka. UHD, Ultra High Definition video). When display technology verges on the size of walls, then even 4K will not satisfy consumers, and 8K, or higher will begin to steal the attention of consumers.
Computing power to crunch through all that Ultra High resolution data is readily available.
The ability to deliver hundreds of megabytes in bandwidth[10] to the average consumer is on the horizon.

Figure i – Top 16 cities for High-speed connections @35 US$ per month

These advances in home video may seem like a distant dream, but the future is closer than most realize. 4K television was a hot topic at the Consumer Electronics Show, CES ’13[11], in Las Vegas this year. But some consumers may feel that 4K has been introduced too soon. Especially considering that Blu-Ray only recently reached strong sales momentum, and HDTV[12] has finally established a firm foothold in the living room – penetrating also the mobile market. So why 4K video, and why now?

When viewed from the perspective of technology penetration, this is the perfect time to introduce Ultra HD. Higher resolution displays immediately benefit consumers wanting the most real-estate on their devices. More windows, icons, and widgets can be displayed side-by-side in all their high-resolution glory. Businesses and enthusiasts have already been using display resolutions higher than HD for several years. For example, the popularity of 2650×1600[14] (2.5K displays perhaps?) steadily increased as prices dipped below $1000. More recently, Apple released their retina[15] displays in the latest generation of iPad’s (2048×1536 resolution at 264 pixels per inch, ppi) and MacBook Pro laptops, at even higher resolutions (2880×1800 @ 220 ppi). Consumers are quickly becoming acclimated to high pixel densities. Retina displays enhance the subscriber’s viewing experience on smartphones, tablets, and laptops, and create a precursor for ultra-high resolution content.

So how will this Ultra HD content reach the subscriber in the first place? Some cities already offer bandwidth that can accommodate a 4K live video stream[16]. According to New America Foundation[17], at least 12 cities currently offer affordable download speeds above 30Mbps (Figure i) – This is well within the bandwidth requirements of a single 4K video live stream[18] (assuming typical streaming quality, and that the internet pipe isn’t being used for anything else). Moreover, this is offered at a very reasonable fee of 35 US$ per month[19]. At a national level, Asia Pacific rank in the top three. European countries share six of the top ten positions, and the United States holds steady in ninth place (Table I). Even though the national average of some countries can barely accommodate a real-time high definition stream (typically between 4Mbps to 8Mbps used for online HD streaming), the peak download speeds exceeds 30Mbps are enjoyed in a select number of cities around the world.

Table I – Top Countries for Average & Peak Internet Speeds

In any case, sending 4K over today’s internet connections will not be optimal using today’s encoding standards. Streaming encoders would need to utilize the newly finalized H.265[i] format. Current tests show a 15%-20% improvement on the currently ubiquitous H.264 codec, but as implementations of the codec are optimized, promises of a 50% improvement in compression efficiency is anticipated. This means that a 4K movie streaming with a frame aspect ratios of 2:39:1 (aka. CinemaScope typical for Hollywood movies) could be delivered quite comfortably within an existing 30Mbps internet connection. Alternatively (as shown in Table II[ii]), in the case of a Video on Demand (VoD[iii]) service, a 4K movie could be downloaded within 1.5 hours over a 30Mbps connection. HD content using the same service would download in just under 20 minutes, and standard definition (SD) content would complete in little over six minutes[iv].

Figure ii – 4K digital video to the Consumer – Minimizing the Bottleneck

This begs the question; Is there a bottleneck today, in delivering 4K video to consumers? In fact, it could be argued that for major cities in the top 40 countries in the world, there no bottleneck[17]. Internet speeds are continually improving, expanding to new cities, and becoming affordable. Further down the pipe, WiFi standards such as 802.11ac[v] promise theoretical bandwidth capabilities from 87Mbps and higher, to comfortably carry several 4K streams (Figure ii). Alternatively, LAN[vi] speeds of 100Mbps have been available for over a decade, in consumer electronics. As for the final connection between the set-top-box and the TV, the current iteration of HDMI 1.4 already has the capacity to deliver a 3840×2160p (progressive scan) signal at 24 or 30 frames per second, (or 4096×2160p at 24fps). But it is the development of HDMI 2.0, currently in the works, that will extend support to 60fps. This is important because broadcasters will send 4K content to subscribers at their usual 60 frames per second (fps) used in the USA, or 50fps (used in Europe). Furthermore, HDMI v2.0 will support a Transition-Minimized Differential Signal (TMDS[vii]) of 18Gbps which is ample bandwidth for the final delivery of uncompressed 4K video to the television.

Table II – File size, & download times by Video type

To be fair, the main bottleneck in delivering 4K video to consumers is likely in the processing power of the devices responsible for encoding and decoding video. H.265 is expected to take as much as ten times longer to encode video, compared to H.264. Furthermore, 4K has four times the real-estate compared to HD. Therefore, curators of video transcoding should anticipate at least a 40x increase in encoding time when comparing HD@H.264 encoding to 4K@H.265. Thankfully, decoding of H.265 is only two to three times more costly compared to H.264. So adding 4K to the frame will require consumer processors to be at least ten times more powerful than they are today. Whether it be a set-top box, gaming console, or media center appliance, these CPUs will need to be; a) powerful enough to decode 4K in combination with H.265; and b) affordable for the price sensitive consumer electronics (CE) market.

Figure iii – Flexible Displays by PowerFilm

An IMAX-esque Experience

While a full back-catalog of digitally restored Blu-Ray content is voraciously being released on a weekly basis, there are looming questions regarding the absence of available 4K content. Certainly, 4K TV can only be successful if content is available to take advantage of its glorious resolution. But this leads to the inevitable chicken and egg predicament; Which should come first, a) the infrastructure supply chain all the way down to the display, or b) the content? It certainly makes sense that display technology should precede the release of complementary content, and this has ultimately been the industry approach for introducing 4K.

To fuel the anticipated transition to UHD, a wave of film restoration over the past decade has resulted in the scanning and digitizing the Hollywood back-catalog. Thanks to digital restoration pioneers such as Lowry Digital[ii], now owned by Reliance Big Entertainment, high ticket items such as the Disney[iii] and the James Bond[iv] collections were some of the first titles to be digitally restored. At the moment, as many as eighty Blu-Ray titles are being released on a weekly basis[v] – some of which are digitally restored back-catalog titles, and others are recent theatrical releases filmed using 4K digital cameras. It has become standard practice to scan and digitally restore old film masters to 4K, then transcode or downres[vi] the frames for distribution to DVD (standard definition, SD) and Blu-Ray (high definition, HD). For the time being consumers are not aware of an existing 4K version of these titles, nor have access to them. But when the time comes for studios to release their catalogues in 4K, they will have a relatively easy task to prepare them for public distribution.

It’s worth pointing out that the presentation of these 4K digital restorations are inevitably better than when they were originally premiered in movie theater decades earlier – A time of sub-standard lens optics (from today’s vantage point), and were scratches and pops on analog film reels was considered the norm.

Figure iv – RED One 4K (left) & Epic 5K (right) Digital Cinema Cameras

Restoration aside, movie production using native 4K digital cameras was introduced long ago by RED Digital Cinema[vii] – first with their RED One[viii] in 2007, and then with the RED Epic[ix] in 2010 supporting 5K (5120×2700) resolution. Founding member and first employee of RED, Ted Schilowitz commented at NAB ’13 In Las Vegas, “Since we introduced RED back in NAB ’07, thousands of movies have been filmed using our cameras. And it’s not just Hollywood that’s into 4K and 5K production – international studios, and enterprises have joined in as well.”

Figure v – RED Dragon 6K sensors scheduled for upgrade, at NAB ’13 in Las Vegas

RED continues to lead the market with their introduction of the RED Dragon, announced on the 8^th of April, 2013. This new sensor extends their Mysterium® range to 6K – a sensor that supports 6144×3160 – and has an equivalent resolution to a 19 megapixel camera. The Dragon far exceeds the pixel density of any competing 4K camera from competitors[xi] that have recently entered into the UHD production space. Sony is also fighting for market share, with the introduction of their F65[xii], claiming an 8K sensor, although the true pixel count is measured around 5782 x 3060[xiii] (or over 17 million pixels – thus closer to 6K resolution).

Crossing the 4K Chasm

Likely the first 4K experience for consumers has already been – or soon will be – at the cinema. Although most theaters are outfitted with digital projectors using 2K (2048 × 1080)[xiv], they are steadily upgrading to 4K. As the ultra-high definition experience becomes ubiquitous in theaters, movies produced in UHD will be projected[xv] natively, without any reduction or compromises in pixel resolution.

The distribution of 4K content to theaters is an ongoing challenge. With the shadow of piracy looming, content needs to be delivered such that the following contingencies are addressed:

Content Delivery – As the Internet becomes the vehicle to distribute movies to selected cinemas, the appropriate DRM (Digital Rights Management) and encryption mechanisms need to protect the content.
Content Storage – Distributed 4K films require tamper-proof hardware to ensure that content is securely protected while at rest.
Content Rights – Centrally established usage policies are needed so that movies are projected at authorized times, and aptly expire – as authorized by the content distributors.
Content Quality – Maintaining consistency in quality through the use of industry certified projectors, screens, optics, and audio quality is essential to ensuring uniformity in the 4K cinema experience. Using the recently ratified H.265 standard will maintain efficiency in file size and bandwidth, while maximizing video quality.

Figure vi – Penetration of Selected Audio & Video Technologies in U.S. Households since 1981

Finally, it’s worth mentioning the anticipated rate of market adoption of 4K when compared to previous technologies. Studies show that the rate of adoption is increasing with every new technology. The CD[xvii], took 16 years to reach 70% penetration in U.S. households[xviii]. It then took six years to reach the same adoption for DVD[xix] (introduced in 1998)[xx]. HD Television has grown at a similar pace, fuelling Blu-Ray sale in the process. By chance or design as each technology reached 70% penetration, a new format was introduced to consumers (Figure vi). Interestingly, none of the past four recessions adversely affected adoption of these technologies[xxi]. With the introduction of 4K televisions in 2013, it is entirely feasible for 4K to reach similar adoption rates by the end of this decade.

Before consumers benefit from 4K, its successor is already being showcased. 8K[i] supports resolution up to 7680×4320, and has already been demonstrated by NHK[ii], Japan’s public broadcasting organization[iii]. 8K is essentially equivalent to viewing every single frame in the video at the resolution of a 33 megapixel camera.

When 4K eventually arrives to the living room, consumers will turn their attention to 8K and beyond. HD will be relegated to history class, and on display at the local technology museum.