HDTV Won't Be Eclipsed by Ultra HD Any Time Soon

The Consumer Electronics Association grabbed some headlines last week when it released new projections showing U.S. shipments of Ultra HD TV sets (UHDTVs) reaching 57,000 units in the U.S. last month — the first month for which CEA provided tracking — with total shipments looking to reach 1 million sometime in 2015.

You may have wondered: is that good? It certainly sounds good, given that UHDTVs are just starting to arrive on the market. But, in relative terms, 1 million units shipped into the U.S. market is a middling achievement.

What comparisons can we make? Well, let's take a look at the launch of DVD. These days, DVD is thought of as a rousing success story for the home video market. (Hollywood studios only wish Blu-ray Disc matched the household penetration rates of DVD.) But there were plenty of naysayers in the format's early life. DVD was launched in March of 1997. In the format's first 10 months on the market, including the 1997 holiday season, 320,000 DVD players were sold in the U.S. In 1998, almost 1.1 million were sold. By 2001, just four years after the launch, manufacturers were shipping 1 million players a month to retail. So if you were using DVD's launch as a benchmark, you would hope for UHD to reach 1 million shipments in 2014, not 2015. And even that would be no sure sign of success.

Image: Dolby 3D

What about 3DTV? 3DTV is thought to have launched in March of 2010 when Panasonic sold the first 3D plasma set at a Best Buy in New York City, according to The Hollywood Reporter. CEA recently noted that sales of 3DTV-capable sets reached about 2.7 million in 2011, 4.1 million in 2012, and a seemingly healthy 5.7 million in 2013. Unfortunately for 3D content creators, the presence of 3D-ready displays in millions of households has not translated into demand for 3D content. "Consumers are buying 3DTVs," is the CEA's dubious conclusion, "even if they don't really know it." (Is that a good thing?) Well, it's probably best not to hold your breath until ESPN 4K starts broadcasting. But Ultra HD does have some advantages over 3D. Not many broadcasters are champing at the bit to upgrade their HD systems to UHD, nor are cable companies in a big hurry to deploy new set-top boxes ot their customer base, but delivering 4K content over the Internet is simply a matter of sufficient bandwidth to the home. That's one of the reasons why Netflix is widely expected to be among the first content providers to roll out regular 4K offerings — the company's delivery is Internet-native, and it doesn't have an existing HDTV infrastructure to replace.

When it comes to content creation, there are plenty of reasons to shoot in 4K. There are a lot of 4K projectors in theaters, so digital cinematographers should consider it. For footage not destined for the multiplex, 4K is a way to future-proof your content, and it's generally thought to provide the source for a higher-quality HD finish, even including the ability to reframe parts of your image when necessary. It's also a great option for special presentations where you control the viewing environment and can make sure to take full advantage of the increased resolution. But with only 1 million UHDTVs in place in 2015, you might be disappointed in how slowly consumer demand for 4K content at home takes off. Even when consumers have the best new technology at their fingertips, they don't always employ it — the vast majority of those 3DTVs aren't displaying 3D at all, and a significant proportion of the content viewed on HDTV sets is still standard-definition in origin. (I'm impatiently waiting for Turner Classic Movies to go high-definition on Verizon FiOS. I understand it may be a while.)

But if you are producing 4K content today or in the near future, you might want to look outside of the U.S. to find your market. Paul Gray, an analyst at NPD DisplaySearch, noted earlier this year that China is actually expected to lead the world in demand for UHDTVs, with shipments expected to reach 333,000 this year and exceed 2.6 million by 2016. "Initially, we expect to see the highest 4Kx2K adoption in China, Japan and Western Europe, as these regions typically prefer the latest highly featured products," Gray said. "On the other hand, North American consumers are generally more likely to delay purchases of new technology, like 4Kx2K, until prices fall." (NPD expects North America to see 2 million UHD TVs ship in 2016.)

Source: NPD DisplaySearch

More recently, Gray had another sobering thought about the UHD market, which he shared at NPD DisplaySearch's Analyst Blog. Looking at Western European sales trends, he noted a distinct and extended decline in interest in TV purchases following the mid-1990s introduction of flat-screen TVs by Sony and Philips. Gray says TV owners felt that CRTs were obsolete, but the competing flat-screen sets were still much more expensive. As a result, consumers didn't replace their sets unless they had to, and the market remained weak until big-screen prices started to come down in the mid-2000s. He closes with this sobering thought: "Possibly the worst outcome [for the TV market] is that 4Kx2K does indeed catch consumers' imagination: its high cost would mean a similar pause in the market, like that following Philips' first plasma TV in 1997."

The bottom line? Despite the arrival of relatively affordable UHDTVs — not to mention significant hype to the contrary — it's a safe bet that HD will remain the de facto standard for home viewing for the forseeable future.