While 4K will ultimately reach the mainstream, it will be a niche market for at least another five years, with widespread viewing of 4K content arriving in 2019 and growing quickly beyond.
Joel Espelien, author of the new report, notes that short-term viewership of 4K video will be driven by consumer purchases of smart TVs with 4K functionality. However, the diffusion of 4K televisions will occur more slowly than many believe due to poor consumer awareness, high prices, and lack of 4K content. That said, the emergence of 4K-enabled devices will help to fill this gap.
For example, Espelien predicts that iSTBs from companies like Amazon, Apple, and Roku will join smart TVs in supporting 4K streaming from OTT services. “This will create a ‘halo effect’ around broadband video quality and provide a strong differentiator for OTT services such as Netflix and Amazon,” notes Espelien. “This will be a valuable tool in recalibrating consumer perceptions of video quality and reinforcing the value proposition of broadband streaming services.”
According to TDG, iSTBs and Blu-ray players will each account for almost one-fifth of total 4K video viewing in 2017. While physical discs will enjoy only short-term success, the use of 4K iSTBs will be propelled to even greater heights due to several factors, including support from the ‘Big 4’ (Apple, Amazon, Google, and Microsoft); a 1-2 year replacement cycle (versus 7-8 years for TVs); and a sub-$100 price when they finally arrive in market. As such, 4K iSTB diffusion will remain strong throughout the forecast period and surpass 4K smart TVs to become the single most-important platform used to view 4K video aside from legacy pay-TV operator STBs.
While OTT streaming video will be the most notable short-term driver of 4K video, pay-TV operators will also play a defining role. Beginning with on-demand 4K offerings, pay-TV operators will slowly add live 4K support as the ecosystem matures. As Espelien notes, “Regardless of the timing of market entry, and irrespective of the availability of alternatives, the sheer strength of legacy pay-TV and the ability of operators to deliver must-see live events such as the Super Bowl and the Olympics will propel operator 4K-enabled STBs to a dominant position.”