4K video and OTT broadband services are going to seriously affect the traditional broadcast industry

by on July 10, 2015

Stephan Jukic – July 10, 2015

If there’s one thing we can be sure about with 4K ultra HD it’s that the resolution has become an absolutely popular medium for the OTT (over-the-top) community in video production. Amazon, Netflix and a number of Hollywood oriented studios are now shooting all of their original content in 4K resolution and they seem to absolutely love the new format.

Amazon offers a monthly package of 4K content that comes part and parcel with its regular streaming video service wherever it’s available and Netflix has done something almost identical by offering a “premium” $11.99 per month package of streaming content which includes the entire company’s 4K movie and original programing selection along with other TV programs like Breaking Bad, which were shot in 4K.

And we can go on, YouTube, UltraFlix, M-Go and Comcast’s X-finity service are all doing very similar things to one extent or another.

In other words, the OTT industry is leaping into 4K content creation/distribution with gusto and are well ahead of pay-TV and broadcast competitors in this particular area above all others.

And of course this should be the case, when it comes to the above services, providing 4K video content is pretty much as easy as creating it and distributing it via broadband streaming connections. While filming in 4K requires new types of storage and video equipment, it’s not extremely expensive of difficult unless it starts to stray into broadcast and particularly live broadcast territory. A service like Netflix doesn’t do either thing with its 4K movies/shows and can thus simply film, stream and collect revenue from consumers.

In simple terms, the OTT services have built their entire business model, with relatively low investment, over top of a far more expensive broadband infrastructure built by other companies.

Which brings the point to another major trend that’s happening with 4K. Namely that the technology in video is definitely growing much faster with the Internet Protocol (IP) side of the content distribution spectrum than with traditional broadcast channels. And this is happening largely for the reasons stated above: Broadcasters have a much higher entry cost to carry than OTT services before they can simply start letting the 4K video flow on to consumers. This naturally makes them quite wary of jumping the gun and putting down capital for something with a still relatively limited consumer demand.

Discovery Channel is just one major broadcaster that's interested in 4K but leery of the heavy investment involved.

Discovery Channel is just one major broadcaster that’s interested in 4K but leery of the heavy investment involved.

However, this then plays into a second upcoming trend that has only begun to take off, namely that by the time broadband is really ready to jump onboard with 4K, it will possibly have little market left to jump into. Instead, the content market will already be dominated by a very well developed network of broadband content services.

To name just one example which indicates this: In 2014, Samsung and Comcast, the media giant, signed a deal for distribution of 4K/UHD content to sets belonging to the electronics manufacturing giant. This content largely consists of a mix of NBC programming (NBC is owned by Comcast) and titles from Hulu in 4K UHD. However, and this is the kicker, the content is reaching those new Samsung 4K TVs via OTT broadband channels, through Comcasts own set-top box for video downloading. This is a limited selection of videos and shows we’re talking about –and it’s available to newer Samsung 4K TVs right now by the way—but it indicates the trend mentioned above: Content will grow exponentially via OTT services through broadband channels, while it possibly stagnates through traditional cable and possibly even satellite broadcasting. This will be a particularly notable trend with 4K ultra HD content in the years to come.

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