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There are a lot of people insisting that Ultra HD (aka 4K) is the next big thing. 4K is demonstrably one of the technologies coming up next, and it is inevitable that 4K will eventually be big, but “next” and “big” both at the same time? You might want to adjust your expectations for the longer term.

The Diffusion Group (TDG) argues in a new report it will soon release that there is little incentive to invest in the 4K ecosystem, so 4K is going to remain a luxury niche in the near future.

“We’ve extended our time frame to 2025; 2020 is too close,” said TDG senior analyst and report author Joel Espelien. “We think it will take a long time to roll out.”

Today, traditional pay TV distributors are still only experimenting with 4K, for major events, typically sports. The only place to get 4K on a regular basis is streaming sources (Netflix, Amazon), or on-demand – which Espelien referred to as quasi-streaming.

Even so, there still isn’t that much 4K content available. New content is being shot in 4K for future-proofing, but that’s little incentive for now.

Even though most installed sets are HD, most pay TV is still consumed in SD, he noted. What’s the incentive to go buy 4K TV sets, which remain expensive?

There’s an argument that if viewers are going to buy new TVs, they might as well buy one capable of 4K resolution. That suggests that support for 4K will grow naturally, but it also suggests it will grow slowly.  

And 4K simply doesn’t make sense for PCs, tablets, and especially not for smartphones –“nobody is streaming 15 Mbps to smartphones. That’s just Looney Tunes, even on 4G,” Espelien observed.

Sports often lead on new resolution, but “it’s going to be a long time before every NFL game is in 4K” Espelien said.

People aren’t using physical media as much, so hitting the market with Blu-ray players that can support 4K is unlikely to be much of a push, he said.

Over the top boxes that can support 4K will probably hit the market next year, but again, the ecosystem will still be limited.

It’s great that “Orange Is The New Black” might be available in 4K, but nobody is going to run out and buy a new device, whether it’s an OTT box or an 80-inch 4K TV set just for one or two shows, Espelien opined.

Demand for HD was minimal until the DBS providers started hawking it – forcing cable companies to follow. Asked if history might repeat itself, Espelien was skeptical.

“It might happen eventually, but not soon,” he said. Dish is providing 4K only on demand. “It makes no sense right now to broadcast 4K.”

Ultimately, he said, pay TV distributors will be leery of doing 4K until the whole ecosystem is established.

There’s no reason to invest. No one is on the verge of losing market share because they don’t have 4K. Nobody is threatened with losing their premium status because they don’t have 4K.

The one wild card might be HBO, Espelien said. If HBO were to make 4K content commonly available through HBO GO? “That would be interesting,” he said. “That would be a pretty amazing step for them.”

The report, "Forecasting the 4K Video Environment, 2014-2025,"  is now available.

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