Deutsche Telekom will start offering 4K Ultra HD channels as part of its Entertain TV service later this year, according to a report from DTVE. Peter Kirchoff, VP of content at the German incumbent, made the announcement at the MIPTV event in Cannes.
Deutsche Telekom AG (NYSE: DT) does offer some 4K content today via Videoload, an online VoD service, but no linear channels to the TV set-top box. The operator will launch between two and four channels initially, and increase that number to eight over time. The operator is also experimenting with virtual reality, so bandwidth will be a major constraint as these "fat video" services are rolled out.
Both public and commercial broadcasters in Germany are developing UHD services, and Germany has about 3 million homes with UHD sets today. Approximately one in every four new TVs purchased in the country are 4K sets.
Deployment of UHD has been relatively slow in the western world. In the UK, Sky is offering a UHD service on its Sky Q platform, but that doesn't include dedicated channels. There are a selection of shows, movies and sports that are delivered in UHD and viewers are alerted when they are available.
BT Sport has been more aggressive with UHD, launching the first UHD channel in the UK. It is primarily focused on soccer, leveraging BT's hard-won rights to the Champions League and Europa League, as well as English Premier League and FA Cup matches. (See BT Sport's COO Discusses UHD.)
In the US, AT&T Inc. (NYSE: T) has followed the same approach, using satellite service DirecTV to target major sporting events such as the Rio Olympics, PGA golf, Major League Baseball (MLB) and beach volleyball. But DirecTV also offers a couple of linear UHD channels with movies and variety programming. (See AT&T's Ward Talks 4K.)
However, fellow US incumbent Verizon Communications Inc. (NYSE: VZ) is just getting started, with trials commissioned for this year using content from satellite distribution network
SES S.A. (Paris: SESG). The UHD channels under consideration include the NASA TV channel, 4K Universe, C4K60, Fashion One 4K, Insight, Nature Relaxation, Travelxp 4K, UHD1 and SES's own demonstration channel.
Dish Network LLC (Nasdaq: DISH) also offers some content from BBC Americas and Netflix Inc. (Nasdaq: NFLX) in UHD, but it's unclear how much of Netflix's "UHD" content is actually delivered at that quality. Netflix uses Adaptive Bit Rate streaming (ABR), which adjusts the video stream to available bandwidth. With Netflix's own ISP Speed Index showing that the average connectivity is in the 3-4Mbit/s range across ISPs and regions, it's obvious that not many users are watching UHD streams. Akamai's latest State Of The Internet (SOTI) report did find that 10% of connections were 25 Mbit/s or above worldwide, but that means 90% are still unable to deliver really high-quality UHD video.
Consumer research has also found that the difference between 4K and HD is only discernible by most people on TV screens above 55-60 inches. Not only does that make the value of the service questionable on PCs, tablets and smartphones, it also means those with smaller TV sets will be unable to appreciate the benefits.
This, along with the bandwidth challenges, is probably an important reason why operators are moving slowly. But there's another reason, and it is highlighted by US cable heavyweight Comcast's decision to postpone deployment of its UHD services.
While 4K on its own doesn't have the same impact on lower screen sizes, the combination of 4K and High Dynamic Range (HDR) is noticeable even on smaller screens. Comcast Corp. (Nasdaq: CMCSA, CMCSK) wants its UHD service to include HDR and 10 bit HEVC encoding to ensure a truly premium experience, but the technology isn't entirely baked yet. In addition, competing HDR standards are creating a schism within the industry and licensing issues for HEVC, a newer and more bandwidth-efficient compression standard required for "fat" UHD video, may be constraining its adoption. (See UHD Forum's Fautier Clarifies UHD Growth Path and Comcast Has a New Timeline After 4K Delay.)
There are also additional features such as Higher Frame Rate (HFR) and Wide Color Gamut (WCG) that add to the UHD viewing experience. In fact, some believe they are as important as HDR, and would like to include them all into their UHD service before deploying it.
Still, global shipments of UHD TVs are expected to reach 330 million by 2019, so there will be a ready market of homes waiting for content to come to them. SES also predicts that UHD channels will grow from 39 at the end of 2015 to 786 by year-end 2024. As such, content will steadily grow in coming years, though no explosion is imminent.
It's a tricky decision for operators -- wait for the full-featured UHD experience that will blow away customers, or give way to marketing pressure and launch a service that might disappoint, and then make it harder to get adoption further down the line. On top of that, the bandwidth required for the service continues to be a challenge. It's no wonder we are seeing cautious progress.
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation