The State of 4K and HDR 2017
High-profile launches by Sky and DirecTV aside, there are only around 70 channels globally outputting 4K/Ultra HD (UHD) content by year end, according to Futuresource Consulting data. This consists of a mix of 24-hour and, occasionally, broadcast channels. Even fewer operators are picking these channels up and broadcasting them because, as it stands, the business case doesn’t add up for most of them.
A low penetration of TVs with UHD resolution is one factor. Globally, this is expected to reach 5 percent by the end of 2016. “While higher in developed countries such as the U.S. (15 percent), this is still a low addressable base,” says Futuresource market analyst Tristan Veale (right). (For more on consumer 4K hardware, see below.)
“Bearing in mind that 4K/UHD cost more to produce (or acquire) and distribute, in order for pay TV operators to make a profit either the extra costs need to be low, or they are significantly improving the service enough to be able to charge a significant premium to cover the costs,” says Veale.
There are only a few circumstances where either one or both of these scenarios are actually true. One is that a broadcaster/platform owner produces its own content, and as such it gains some efficiencies by shooting and producing in 4K/UHD and then outputting a 4K and HD feed (BT Sport and Sky are doing this—see below) and maybe even an SD stream.
A second circumstance is where distribution costs are low. Since the addressable base is low, the most cost-effective solution is delivery via IP. This is improved further if the consumer is upsold to a higher-value broadband package by taking a double, triple, or quad play service from the operator. “Broadband has a much higher margin than TV, and therefore this offsets the cost of producing in 4K/UHD,” says Veale.
A third scenario is where the content being recorded is of sufficient quality that it is imperative for future-proofing or reselling that the content be produced in 4K/UHD. An example is BBC’s Planet Earth II, which is likely to have a 10-year resell cycle, and major sports events like the Olympics, which were actually recorded in 8K.
If we take those three criteria for launching a 4K service, we find that BT Sport has all three, Sky (U.K.) has two and a half (its delivery isn’t IP but still isn’t hugely expensive), and Rogers in Canada has all three. DirecTV has high-quality content but doesn’t meet the other criteria.
However, there are other elements to 4K/UHD beyond resolution that make a significant visual impact on the consumer. When added into the mix, these elements make the business case a lot more attractive, but they are aimed at an even smaller addressable base.
Bright Future for High Dynamic Range
High dynamic range (HDR) addresses the difference between the darkest and brightest parts of a picture and is considered an even more profound upgrade than resolution.
Because of the move to 10-bit coding needed for recording, distributing, and delivering HDR, wide colour gamut (WCG) is improved almost as a by-product. But visually, it makes a big difference.
“This is the main reason we are seeing apparent limited activity from pay TV operators [in 2016],” suggests Veale. “They know that when they can distribute HDR to consumers, the visual impact is sufficient that they don’t need the best quality sports or similar content to be able to charge the consumer more.”
This piece of the puzzle is now in place. The ITU standard for working with HDR was ratified in July, followed in November by industry-led consortium DVB, which specified UHD-1 Phase 2 delivery with HDR, based on the same ITU standard. This is anticipated to accelerate broadcaster UHD with HDR services.
David Wood, chair of the DVB Commercial Module for UHDTV, called the agreement “probably the tipping point for the new age of UHDTV.”
The BT.2100 UHD standard itself provides two options for production and post-production, known as Hybrid Log Gamma (HLG) and Perceptual Quantizer (PQ).
PQ, a vision-based system, was designed by Dolby and relies on the ability to control the display. It can, for example, play back on displays up to 10,000 candelas, meaning that its dynamic range will be greater than HLG. It will most likely be used for cinema and drama shows. The BBC and NHK developed HLG, a scene-based system that works across a range of production and viewing environments. It enables backward compatibility with legacy 4K displays and is considered easier to introduce into a live workflow.
Colour space conversion from UHD BT.2020 to HD BT.709 is another challenge, particularly for the retention of accurate hues.
“Crucially, the standard enshrines the ability to convert between them,” says Andy Quested, chairman of the ITU group responsible for the breakthrough. “So if a Hollywood movie is delivered to a broadcaster in PQ, it can be converted to HLG for delivery, easily, and without damaging the output.”
Since both can be used for recorded and live content, from a broadcaster’s perspective it may come down to use cases.
Increasingly, commissions are likely to arrive with a 4K and HDR deliverable. These include Sony TV/Crackle.com’s drama Snatch, Amazon factual format The Grand Tour, and BBC wildlife series Planet Earth II.
The next step is distribution, for which DVB provides standards across Europe. Broadly, both HLG 10 bits and PQ 10 bits options for encoding will be agreed on, and in practice Philips/Technicolor, Qualcomm, and Dolby all offer routes based on PQ in addition to an HLG and a basic PQ.
2017 will see a great deal more HDR activity as the addressable base of 4K UHD TVs with HDR widens. As an example, in North America the penetration of true HDR TVs will be between 10 percent and 14 percent at the end of 2017.
DVB’s new spec allows for high frame rates (HFR) beyond the current 50/60 Hz, but it will probably be late 2017 or early 2018 for widespread broadcasts, according to Futuresource. “There is barely the bandwidth available for shooting in 4K, let alone shooting in 4K at twice the frame rate,” says Veale.
IP Production Comes of Age
Live sports continued to spearhead pay TV operator moves into 4K UHD, and rapidly evolving IP and IT technology will likely prompt further investment.
“Probably the most significant shift in broadcast tech we’ve seen through 2016 has been the continued rise of the IP-enabled broadcast operations centre,” says Rory McVicar, product manager, CDN EMEA, at Level 3 Communications. “As this trend accelerates, Ethernet is increasingly being looked to as the common standard for broadcasters embracing OTT and multi-screen viewing.”
Vendors began the year aligned to different IP paths but gradually shifted behind the Alliance for IP Media Solutions (AIMS) aided by endorsements from Sony, Evertz Microsystems, and vendor trade body IABM.
NewTek is a significant lone wolf. It maintains that its Network Device Interface is a strong alternative, releasing the IP Series, a modular system interconnected with Ethernet. This includes the NewTek VMCQ Video Mix Engine, a control surface and input and output modules that can all be scaled for whatever size production is required. However, NDI offers a heavily compressed means of routing 4K over IP.
AIMS promotes a less extreme, but still compressed, signal. It doesn’t specify a codec, but the smart money is on TICO.
What AIMS managed to demonstrate successfully last year was interoperability. A showpiece working studio in HD at Belgium’s VRT was the year’s prime example. The actual impact on broadcasting of IP/IT has, however, been minimal in real terms.
“Most companies are either still in the planning stages or are yet to start formally thinking about IP, but there is definite forward momentum,” reports Adam Cox, senior analyst at Futuresource Consulting.
Futuresource’s latest “Video Server Market Overview” report gives an idea of where the industry has reached: only 9 percent of video server ports (I/Os) will be IP in 2016 (up from 5 percent in 2015).
The transition to IP is arguably the largest technological transition in broadcast over the past 15 years (maybe ever). As such, it’s as much about people as it is about technology.
“IP requires new skill sets, and that means either replacing or training existing staff or both,” says Cox. “Both will, and are, meeting resistance as this is a traditional industry and this is a big change. This has a knock-on impact. According to our research, when switching to IP-centric systems, many broadcasters are still using a ‘traditional’ architecture. That is, they are using IP as they would have used SDI—point to point. This is therefore a halfway house in terms of IP adoption [that] involves using new technology in an old way.”
4K was always a format pushed onto the market by consumer electronics vendors, and the relative lack of consumer interest in the higher resolution along with distribution bottlenecks are restricting adoption