New 4K Ultra HD TVs Have One Big Problem

by Brad Moon | January 15, 2013 9:28 am

New 4K Ultra HD TVs Have One Big Problem

TV manufacturers from Panasonic (NYSE:PC[1]) to Samsung would appreciate it if you would do one simple thing: Help ease their struggles by clearing a space on your wall for one of those massive new 4K Ultra High Definition television sets — you know, the ones that were the stars of the Consumer Electronics Show last week[2]?

If a $25,000 price-tag seems too steep to justify an upgrade — $300,000 if you go all-in with Westinghouse’s 110-inch 4K monster TV — don’t worry: Prices will come down as production ramps up and economies of scale lower component costs. Heck, in 2004 the average price of a 42-inch plasma HDTV[3] was $4,446, dropped to $2,611 a year later and now is under $1,000.

Unfortunately for TV manufacturers, though, there’s still another big problem standing in the way of 4K’s success: Getting content that makes the most of the new TV sets’ capabilities. And until they solve that problem, TV-makers’ dreams of 4K sets saving their bacon simply aren’t going to come true.

The Numbers Game

High definition content is available in various varieties, including 720p, 1080i and 1080p. Of these, 1080p is the real deal — a picture resolution of 1920 x 1080 pixels with no trickery (like the interlacing that gives 1080i its name and reduces sharpness). 1080p HD requires over 2 million pixels on a TV screen.

4K Ultra HD is a picture with a resolution of 3840 x 2160 pixels. This requires over 8 million pixels on your TV — a whopping four times the resolution of HDTV (hence the name).

Blue-ray discs — the highest capacity disc format in general use — currently maxes out at 50GB for a dual-layer disc. That’s plenty of storage to hold a 1080p movie. However, the first 4K movie available for consumer download was a whopping 160GB[4]. To be fair, it’s in 4K Cinema format, which is slightly higher resolution than consumer 4K. But still … a 4K movie is too big to fit on a Blue-ray disc.

Grasping for Solutions

As a result, 4K content is only available online at the moment. In fact, Sony (NYSE:SNE[5]) provided 4K movies preloaded on portable hard drives for buyers of its 84-inch 4K set last year, but that’s far from a long-term solution. At CES, the company announced plans to develop a network that allows users to download 4K content, but that’s problematic too. Home-internet bandwidth isn’t unlimited; generally download caps are between 250GB to 300GB[6] — not very many 4K movies. After that, you’ll get charged extra for data.

As a stopgap, Sony is also pushing a “Mastered in 4K”[7] standard for Blue-ray movies, but this is not 4K content. Rather, it’s 1080p movies that a 4K TV set will upscale when playing, which doesn’t look nearly as good as native material does. Chances are your current Blue-ray player is capable of upscaling a DVD to HD and, while it may look a little better, it’s easy to see it’s not actually high definition.

Plus, at this point, Sony only has five of these movies in the pipeline anyway.

What about compression? After all, Netflix (NASDAQ:NFLX[8]) is able to stream “SuperHD” movies that look pretty good compressed, and is working with Samsung on 4K streaming. Tech site Gizmodo got a look at early results, though, which it described as “horrifying[9].” It’s early, but the bottom line is that bigger screens are less forgiving.

Could broadcasters supply native 4K content? Don’t hold your breath on that one. We’re ten years into widespread HD adoption, but the majority of the channels on cable[10] are broadcast in 720p or 1080i — even premium channels like Disney’s (NYSE:DIS[11]) ESPN. Don’t expect companies to jump on board with a new 4K format that gobbles four times the bandwidth of the format they’re avoiding, while also requiring expensive upgrades to filming and broadcast equipment.

The Bottom Line

Even though we can expect to see a day in the not-too-distant future where a 4K Ultra HD television is affordable, it won’t matter if the content problem isn’t resolved. With the way things look now, Ultra HD runs the risk of repeating the pattern of 3D televisions.

The feature was promised to revolutionize the viewing experience and was the breakout technology at CES in 2010, but early adopters that braved the price-tag[12] quickly found a lack of 3D movies for sale. The 3D experience was also less-than-fantastic.

Now, 3D is just another feature on a TV — not a premium one. If 4K suffers the same fate, the TV manufacturing industry is unlikely to escape the doldrums any time soon.

As of this writing, Brad Moon did not own a position in any of the aforementioned securities.

Endnotes:
  1. PC: http://studio-5.financialcontent.com/investplace/quote?Symbol=PC
  2. Consumer Electronics Show last week: http://investorplace.com/2013/01/3-big-areas-to-watch-at-ces-2013/
  3. the average price of a 42-inch plasma HDTV: http://articles.chicagotribune.com/2006-07-17/business/0607170112_1_high-definition-hd-average-price
  4. was a whopping 160GB: http://gizmodo.com/5914426/the-first-cinema-resolution-movie-download-available-to-consumers-is-160gb-and-absolutely-breathtaking
  5. SNE: http://studio-5.financialcontent.com/investplace/quote?Symbol=SNE
  6. 250GB to 300GB: http://www.usatoday.com/story/tech/2012/10/01/internet-data-cap/1595683/
  7. Sony is also pushing a “Mastered in 4K”: http://www.theverge.com/2013/1/7/3848972/sony-planning-to-release-a-range-of-4k-blu-rays
  8. NFLX: http://studio-5.financialcontent.com/investplace/quote?Symbol=NFLX
  9. which it described as “horrifying: http://gizmodo.com/5974327/netflix-4k-streaming-video-doesnt-look-very-good-yet
  10. majority of the channels on cable: http://reviews.cnet.com/hdtv-resolution/
  11. DIS: http://studio-5.financialcontent.com/investplace/quote?Symbol=DIS
  12. braved the price-tag: http://voices.yahoo.com/3d-hdtv-samsung-makes-first-move-5616790.html

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