ITEM: Analyst firm NSR has declared UltraHD video a serious growth market for both linear TV and OTT video. But while the former is in no real danger of being cannibalized by the latter, linear TV players can’t afford to wait too long to invest in UltraHD if they want to cash in on that growth.
NSR is projecting serious long-term growth for UltraHD pretty much everywhere on every platform. On DTH platforms, for example, NSR expects UltraHD linear content to consume around 70 transponders globally from over 315 UltraHD channels by 2024, which works out to an estimated additional $185 million in leasing revenues from UltraHD content on DTH alone.
For video distribution to cable and IPTV headends, meanwhile, NSR projects 180 UltraHD channels on Ku-band and 75 channels on C-band, leading to “a combined total of 57 transponders, roughly 4% of global distribution capacity on all bands attributed to UltraHD, leading to an even larger $219M in leasing revenues.”
UltraHD’s main selling point in the linear TV space is an upsell/premium opportunity either in saturated markets like Korea, or developing markets like India.
But it’s also already making headway in the OTT space, notably in North America where Netflix has established an UltraHD subscriber base and is already demonstrating higher ARPUs as a result.
If that sounds like a threat to linear TV, NSR’s Alan Crisp advises linear players to remain calm. While OTT video may be cutting into linear TV’s viewing hours, consumers aren’t about to abandon linear TV altogether – movies and live events such as sports are compelling enough content to keep them subscribed. And it’s exactly that sort of content that’s now being filmed in UltraHD.
However, Crisp notes, linear TV players can’t afford to let OTT players get too far ahead of them in the UltraHD game:
Without an UltraHD service in the medium-term, Linear TV may appear to be a lower quality service compared to OTT in regions that are offering UltraHD content. Thus implementing UltraHD for sports content adds yet another compelling reason for customers to sign-up and remain subscribers for pay TV services. With Netflix, YouTube and other OTT platforms already serving UltraHD content and consumer awareness and familiarity of UltraHD rising, consumers in developed regions will come to expect UltraHD content on their pay TV services, sooner rather than later. No wonder satellite operators are upping their investment for these high quality products.