The adoption of 4K TV is accelerating at a pace greater than the adoption of HDTV a little over a decade ago. It’s now estimated that one-third of U.S. households will have a 4K TV by 2019. Similar to the transition to HDTV, manufacturers and content providers are scrambling to capture the market through a better and richer viewing experience. However, unlike a decade ago, the rapid adoption of 4K TVs is taking place in an evolving and highly competitive marketplace, and may actually have a profound impact on how and from where households experience high-quality content.
Driving Factors
A consumer purchasing a high-definition TV in 2006 would have to simply wait for the cable operator to upgrade from SD to HD set-top boxes. There was no alternative for programming, except moving from cable to satellite TV. There were no retail streaming devices or OTT services from which to choose. That is not the case with the evolution of 4K TV. Cable operators are now faced with the realization that without an investment in 4K/HEV, their customers will be motivated to seek out alternatives for their service. Therefore, future proofing is unavoidable. The recent announcement of YouTube TV is another example of increased competition.
Traditional set-tops are limited, and unable to offer IP-based services. Pay TV operators will have to make a choice: offer IP-compatible traditional set-top boxes or deliver content straight to an IP-enabled retail system.
Both require infrastructure shifts. However, the latter would most likely offer pay TV providers a much longer shelf life in the homes of its most loyal customers.
This is not a simple decision for many operators. It speaks directly to the question of providing pay TV as part of your overall solution or simply turning that over to a third party and being a passive video provider for your customers. This is especially true for small- to medium- operators that face growing competition and innovation from OTT solutions. These small and medium-sized operators were critical in the creation of the industry, and the dedication and contributions they make to pay TV should not be easily dismissed.
Taking Advantage of Today’s Technology to Compete Tomorrow
Though a transition from legacy systems to an IP-based solution may be a more profitable and scalable business model, in order to take the leap, cable operators must take advantage of the technology that exists today to set themselves up for a viable future.
There’s promise in IPTV delivery solutions for pay TV providers, for the simple reason that it could increase their ability to provide programming in the format that better maps to consumer expectations. Despite the pace, pay TV providers will choose to move. One thing is certain: competition in the video marketplace remains intense. However, there’s still time for them to come out on top.
Charlie Nooney is CEO and chairman at MobiTV.
