The CTA (formerly the CEA) held an event in New York City recently called the Innovate Conference, at which several members of the TV industry discussed the problem with UltraHD content delivery.
Advances in picture quality are driving TV sales. However, major content distribution networks do not appear to be close to supporting the extra data, said John Penney, CTO of Starz!, a cable and satellite network in the USA.
Image credit: HD GuruCompanies like HBO, which already charge a premium for their service, have little room to add another price tier, Penney said. He also lamented the costs involved with switching: “Netflix does a little bit by streaming, but for the content provider it has to be a mass switch because the cost of doing it in the first place is so much higher initially until everybody does it that way that you almost have to have simultaneous monetisation to offset or else you get large margin compression”.
Rajan Mehta, EVP and CTO of WWE, said that “time will tell” if consumers will actually pay more for premium services like UltraHD and HDR.
It was generally agreed that prospects for future growth in the TV business are beginning to shrink, as consumers begin to use personal devices for their viewing experiences.
“What we’ve seen since [the 2008 introduction of the iPad] in the traditional TV market is that sales have been tremendously impacted”, siad Steve Koenig – senior director of market research at the CTA. “In 32-inches and below, as time has gone by there have been less and less [sales] to replace sets in the bedroom – people simply shift to larger displays, if they are going to have it all, and the tablet and smartphone has become a very personal display that people watch”.
Samsung has begun to deliver UltraHD content from multiple sources to its own TVs this year, said product planning manager Dan Schinasi. However, the company has not singled out a delivery path that it will use to reach the viewer; the company ‘will not position the television as a cord-cutting solution’, HD Guru reports.
Koenig said that the dangers of cord-cutting had been overblown (recent research from TDG seems to agree: Q3 Cord-Cutting Forecast by TDG Research). Consumers like choice but hate complexity – but, at the end of the day, they are sticking with what is familiar. Although Millenials are different from the older generation in how they consume content, much of their cord-cutting has been fuelled by a lack of disposable income. Koenig expects them to return to large-screen TVs and subscription services as they advance in their careers and earn more money.
Only about 5-6% of US households are actually cancelling their pay-TV service, said Koenig. Most people are supplementing their subscription services with OTT options – about 65% of pay-TV households are streaming content.
