Analysis: The role of smart TVs in UHD broadcast

Samsung recently announced that in league with French telco, SFR, it is launching SFR Sport, an app that enables owners of Samsung Smart TVs to bypass the set top box and stream live sport in UHD, over the top (OTT).

Samsung’s TVs now allow for live content to be streamed in UHD without a box or additional accessory to watch the Premier League, the Portuguese Liga and, from August 2018, the Champions League and the Europa League, French basketball, international athletics, English rugby and boxing.

Changing consumption

GfK UK Media and Entertainment Director Mary Kyriakidi said this OTT streaming service is an example of how consumption of sport is changing.

“There is even evidence in stating that sports coverage no longer belongs solely to broadcasters, like Sky,” she said.

“Rather than fighting a losing battle, broadcasters have wittingly partnered with social media, after all, 50% of TV related talk on Twitter concerns sports.

“Also, TV manufacturers like Samsung, which is subscribing to SFR Sport from the interface of its Samsung Smart TV. And pay TV channels such as the sub-licensing deal between BBC and Discovery. All this is to improve the reach and depth of content on offer, allowing for the biggest sporting events to be consumed in an even more immersive way by offering unique behind the scenes content to sports lovers.”

“Launching new services as a consumer equipment manufacturer isn’t easy” - Michael Inouye

Strategy Analytics Vice President and Principal Analyst for the digital consumer practice David Mercer said that while the idea of apps embedded into TVs has been seen over the last few years “in UHD TV this is another step towards the convergence of OTT and pay TV”.

For CCS Insight Vice President of Multiplay and Media, Paolo Pescatore, Samsung is looking to differentiate its TVs from those of rivals.

“For SFR, this is a very much a shrewd move as consumers won’t need another box. But that does mean a loss of revenue for cable and satellite companies, as you don’t need to sign up for a box. This is clearly a great channel to market for SFR. However, traditionally these apps usage has been low. That’s the bit that could be quite cumbersome; how do consumers actually sign up to it and how are the channels marketed to them?”

The allure of UHD might be one factor in helping to drive uptake.

Kyriakidi said: “The benefits are convincing; an elevated viewing experience throughout the duration of a sporting event, but also an ‘as if you are there’ viewing atmosphere before and after the actual event without set top boxes or special equipment. The status quo is far from this description though, given that there is still a significant proportion of the population that merely chooses the first numbers on the EPG out of convenience, so they will select 001 for BBC1 SD rather than 101 for BBC1 HD for example.”

ABI Research Principal Analyst Michael Inouye said on the excitement around UHD that it “isn’t a significant draw today, but a big part of that is cost”. DeABI Research Principal Analyst Michael Inouye said on the excitement around UHD that it “isn’t a significant draw today, but a big part of that is cost”. Depending on the service and market segment UHD content can carry a significant premium over HD content.

“Streaming movies offered by services like VUDU for instance charge prices as high as $30 for a movie that costs $15 to $20 for HD; this is one reason why Apple’s decision to bring pricing parity to HD and UHD was a significant announcement.

”Streaming services and broadcasters similarly often charge a premium and unfortunately UHD content is still typically not found in abundance. It’s still very much like the rollout of HD; you start with a few channels some content and overtime as the libraries grow and more services and channels transition to UHD then the consumers will reciprocate and shift as well.”

Mercer added: “4K TVs have been around for a few years now. But in terms of content, it’s fairly early days. Sky and BT have both launched UHD services, so we’re at the beginning of this move into UHD. But we’re fairly optimistic about its demand and we will see more broadcasters launching UHD content over the next few years.”

Inouye said that the move from HD to UHD also does not have the same dramatic impact the earlier shift from SD to HD did. “The move from SD to HD not only carried a resolution bump but also a change in aspect ratio (from 4:3 to 16:9),” Inouye remarked.

“HDR is perhaps a stronger driver, but so far consumers haven’t shown a great deal of interest or are still largely unaware of HDR. The consumers are also navigating through a lot of nomenclature and technology with this most recent TV cycle. Besides the different branding (SUPER UHD, 4K, UHD, QLED, etc.), you have OLED versus LED (and LED with quantum dot technology), different standards of HDR, various connected CE platforms, etc. Despite all of this pricing and screen size are still dominant factors in consumers’ buying decision.”

There are always a subset of consumers, however, who seek out the newest and best technology and services and these There are always a subset of consumers, however, who seek out the newest and best technology and services and these people will pay a premium for these tyThere are always a subset of consumers, however, who seek out the newest and best technology and services and these people will pay a premium for these types of UHD content, according to Inouye. He added that for the content providers and services it is not an all or nothing; in other words they will not only offer 4K and no HD.

“Rather they will offer both with 4K at a premium to extract as much consumer surplus as they can during this transitional period before UHD becomes fully mainstream.

“Before we know it we’ll also start to see some 8K TVs; granted there have been a few models already in the market but those have costs well into the $10’s of thousands, if not over $100,000. Sharp is planning to sell an 8K TV priced in the $10’s of thousands next year (reportedly $73,000, which is lower than the company’s earlier 8K panel at over $100,000).

“So hopefully by the time 8K prices start approaching more consumer friendly levels, 4K will have become mainstream and be as pervasive as HD is today. There is of course the issue of mobile streaming; quite a few streaming services and/or operators limit streaming quality to smartphones and tablets so this could hamper interest in UHD, but eventually these issues will get worked out,” Inouye concluded.rvasive as HD is today. There is of course the issue of mobile streaming; quite a few streaming services and/or orvasive as HD is today. There is of course the issue of mobile streaming; quite a few streaming services and/or operators limit streaming quality to smartphones and tablets so this could hamper interest in UHD, but eventually these issues will get worked out,” Inouye concluded.

Bursting bandwidth

White continued that another major issue for UHD is the required bandwidth to send content to TVs: “The TV business is all about differentiation. If you can do that with content, fine, and if you can do it with technologies also fine.

“The trouble with all of that is that cable companies and ISPs didn’t want 4K, which is four times as much data. Using HEVC this is cut down by 50% but it’s still twice as much data. This is driving broadband speeds. HDR adds 25% maybe, and that was the choice of ISPs in preference. But the entire TV ecosystem has had to be retooled for all this to work, and it has taken time and right now you can’t find a UHD phase two device for love nor money in the real world.”

Kyriakidi noted: “Awareness is low and the streaming and broadcasting in UHD will remain a controversial issue for a while longer, until a larger proportion of the population gets hooked and drives it forward. For now the sales figures for standalone set top boxes in the UK speak loud by displaying a continuous decline since switchover in 2012. So, in our view, if this was something relatively easy to do, it would be very surprising if other manufacturers haven’t or were not planning to get on the OTT in UHD bandwagon.”

Inouye commented on whether he believes more TV manufacturers will jump on this bandwagon: “TV manufacturers and Samsung in particular have been relatively active in the content space. Samsung for example has offered inhouse services and forged partnerships with content owners and operators.

“Comcast/Xfinity in the US for instance allows some of its broadband customers to stream their TV service to a Samsung (and soon LG,) TV or Roku box without a typical operator supplied set top box. In addition you have both sports programming via OTT and authenticated services on connected consumer equipment. So I’m not surprised to see the [SFR content] coming to Samsung TVs, but if the company itself was the one who negotiated and secured sports rights (and particularly if they are exclusive,) then that could have more bearing on the market; although it sounds like SFR had a key role in the rights issues.”

However, he added: “I wouldn’t expect other TV manufacturers to necessarily follow suit unless Samsung sees strong returns. Launching new services as a consumer equipment manufacturer isn’t easy and Samsung has cancelled several of its inhouse services in the past. Most connected consumer equipment platforms act more like a content platform or conduit than a service provider.”

Yet Mercer concluded: “Samsung is by far the biggest TV brand globally, but we will see more [moving into this OTT streaming of live sport via an app to the TV]. This is not an exclusive idea in itself, so we will see similar moves from other manufacturers.”