Inside IT
The Newest Marketing Keyword, All about UHD TV (Part 2)

We’ve learned about UHD(Ultra High Definition) and when the right time to buy a UHD product and service is in the last posting. Today, let’s talk about how the TV terminal industry is getting ready for UHD and how the content production industry is growing, followed by how the network and the pay TV industry are doing lately. We’ll also take a look at quantum dot and OLED(Organic Light Emitting Diodes) which drew attention at CES 2015.

CPND structure of broadcasting system

CPND structure of broadcasting system

How is the TV Industry Getting Ready for UHD?

First, let’s take a look at the terminal industry and their marketing strategy which are considered the most aggressive and advanced in the UHD field.

As far as I remember, TV manufacturers started using the term UHD in their marketing about a couple of years ago. Back then, they could differentiate themselves from the other TV providers by manufacturing large UHD units. Here at CES 2015, however, All TV providers had already adopted the UHD model as the new norm. They were already competing against each other for 8K UHD although the age of 4K UHD was only beginning, and the keywords they used to distinguish themselves by were quantum dot and OLED. Like this, all the new products being launched were based on UHD.

According to a market research firm Display Search, the sales of UHD TVs will grow dramatically, reaching 153% compared to last year. Some also say FHD (Full High Definition) will go through growth for the first time since it was launched in 2005. The bottom line is UHD TVs will spread through the market, but it’s going to take a while for them to replace up to half the entire number of TVs because people tend to replace their TVs every 7 to 8 years.

Though it’s not directly connected to this article, I’d like to introduce quantum dot and OLED which were both mentioned multiple times at CES 2015. Quantum dot, which was first introduced by Sony, is the technology that enhances color reproduction when applied to the pre-existing LCD. This means it still holds all the limits LCD used to have. In other words, it’s more of a technology that improves the existing products’ performance, than a future display technology.

OLED is one of the technologies that LG Electronics marketed aggressively at CES 2015. This technology is much more like a new display technology with various merits compared to quantum dot. See the table below for more detailed information.

Comparison between OLED and Quantum Dot LCD

Comparison between OLED and Quantum Dot LCD

How is the Content Production Industry for UHD Getting Ready for the Change?

Let’s see how UHD related content production is going, then. In Korea, the terrestrial TV channels (MBC, SBS, KBS, and EBS) are currently producing 80% of all broadcasting content. This means they’re the ones to start working on UHD content production for the majority of people to enjoy UHD content. The problem, here, is that we don’t really know when and how much UHD content will be made in the near future.

I think another thing I should mention is the network (frequency), now that I brought up the whole issue of terrestrial TV. The Korea Communication Commission recently briefedthe president in a report about how to secure frequency in order to support UHD TV. The communication companies and pay TV industry, though, are strongly opposed to their plan. One reason is because the government usually distributes a 700MHz band to the communication networksaround the globe, and the Ministry of Science, ICT, and Future Planning also agrees with this. The other reason is because the rate of direct reception for terrestrial TV channels is only 6.8% in Korea. What they’re saying is that it’s very inefficient to distribute this high quality frequency for free when only 6.8% of people are going to benefit from this policy. I think it’ll take quite some time for the terrestrial TV channels to get frequency for UHD TV transmission because of this big dispute.

Terrestrial TV has another problem in producing UHD content besides this: It’s the broadcasting standard and equipment. For terrestrial TV to create UHD content and transmit it through their frequency, they need to have UHD equipment as well. The standard for this change must be codified beforehand to do so, but we’re yet to see such a move to set the standard. This is actually about the same around the world, since there isn’t any standard for this UHD equipment and broadcasting.

The US announced that they will legislate the ATSC (Advanced Television System Committee) 3.0 standard which covers terrestrial UHD around the end of 2015. The UHD standard Korean terrestrial TV channels poposed is based on the European DVB-T2, but this can be problematic because Korea’s standard for digital broadcasting is following America’s ATSC. It’s expected to take at least three years for Korea to adopt UHD equipment and commercialize it supposing they take care of the dispute about the frequency and legislate to the US standard. Taking into account Korean viewers’ pattern, this means you won’t really need UHD TVs at least until 2017.

The situation is a bit different for movie content, though. Movies are produced to be played at movie theaters, so they’re created for UHD from the beginning. Unlike terrestrial TV, most movies are compressed with a codec called H.265 (HEVC), and can be played on any terminal as long as they support this codec. What I’m saying here is that although movie content is already prepared for the change toward UHD, the broadcasting content on terrestrial TV has a long way till the commercialization of UHD and has multiple issues to take care of.

How is the Network and Pay TV Industry getting ready for the Change?

Now that we’ve looked at the TV providers and UHD content industry, let’s turn to the platforms and network. As for platform, there can’t be multiple channels because the only UHD content available is in movies and there are also some network issues. This is why we only see VOD service and a single UHD channel on our TVs. The issue related to platform isn’t so difficult to solve, because what’s important is to take care of content and network problems.

What about network, then? Network covers terrestrial TV, Pay TV(cable, IPTV, satellite), and the internet network, the basis of OTT(Over The Top) service. It doesn’t seem like Terrestrial TV networksaregoing to be able to take care of the problem since they’re going through some tough conflicts against communication companies with the government and congress involved. Other networks besides terrestrial TVare quite dependent on how other companies are doing. IPTV and OTT services are different because only one of them secures QoS(Quality of Service), but they’re pretty similar to each other in the sense that they’re both based on high-speed internet. The problem with IPTV is that it may take a while to load when users change channels that are far apart. This is because they have a structure which transmits the channels only right next to the channel the user is currently watching to the final set-top box due to the lack of bandwidth.

In order to provide UHD content for multiple channels which demand a wider bandwidth, the network needs to be advanced to a GIGA network. As this, many communication companies are rushing to launch GIGA internet service and have been going for aggressive marketing strategies since last October. KT, the first company to launch this service out of all three Korean telecommunication companies, now has 100,000 members for their GIGA internet service while LG U+ and SK only have less than 200,000 in total. The number of members using their new services still rests at about 2% of the entire IPTV membership(which is up to 10 million). It’s also worth mentioning that most of the people who are happy with the speed of the internet service they’re using right now may not want to go for GIGA internet and pay more for it. I wonder how these companies would market themselves in this case.

The network situation looks a little bit better for cable compared to IPTV. There are still a couple of issues the cable companies should take care of.

One is their financial structures. The cable companies in Korea usually make a 10% to 20% sales profit, but the biggest chunk of their profit comes from infomercials which is why they’re so dependent on them. The telecommunication companies are finding their customers using aggressive marketing strategies, so it’s hard for them to get enough investors against major telecommunication companies that are 20 times bigger than cable companies.

Another problem is about frequency. Cable companies still have over 7 million members for analog broadcasting services, even though the terrestrial TV has switched to digital. This means the proportion of analog frequency is still high enough to keep them from utilizing their frequency more efficiently. In order for them to readjust their frequency bandwidth, the analog service must end first, which isn’t expected to happen until at least 2018. The frequency problem is especially limiting internet speeds and other convergence services that are based on internet connections.

The bottom line is that the network won’t be able to operate dozens of UHD channels either in the very near future. It also relies on the GIGA internet service distribution and analog service termination.

Now that we’ve learned about how content, terminals, and CPND are getting ready for the UHD era, let me summarize what I’ve mentioned with the table below.

UHD preparation status in each CPND category

UHD preparation status in each CPND category

I hope the table above helps you understand. Right now, it’s not so easy to experience UHD content for many reasons. Although many UHD TVs reveal very aggressive marketing strategies these days, it’d be better for you to wait another two to three years to buy one as long as you don’t have a specific reason to get one now. I’d still like to mention that LG Electronics’ UHD TV shown at CES 2015 has the “U Clear Engine” which has quality up scaling technology.

Six stages of resolution upscaler(Source: LG Display official blog)

Six stages of resolution upscaler(Source: LG Display official blog)

This is the technology that converts the existing FHD video quality to that of 4K UHD automatically. If you’d really like to buy a UHD terminal right now, I think it’d better for you to buy one with this technology.

I’m actually quite satisfied with the current FHD quality, so I don’t really like the fact that I’d have to spend more money for 4K UHD or 8K UHD which will become the new norm. I still think itwould be amazing if the new TVswere able toexpress the depth in the image soviewers could feel like they’re experiencing what they’re seeing on the screen, instead of the usual flat TVs.

All I want TVs to do is make me feel like I’m there experiencing everything I see without traveling around the world, getting on planes, or doing dangerous dives in person. I believe the current UHD is the mediating technology toward this goal, and hope to see the final evolution of technology in the near future.

Written by Young-Joo Kim, LG CNS Communications Media Department

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