A year ago we had witnessed the launch of UHD (Ultra HD) 4K television sets as well as DTH companies such as Tata Sky and Videocon D2h launching their UHD 4K set-top boxes. At that time while the technology had arrived one of the most important question was whether there would be enough UHD TV content from broadcasters. Just yesterday we saw the launch of the first UHD TV channel ‘Insight’ in India by Netherland-based broadcaster TERN (Television Entertainment Reality Network) in partnership with iTV Network.
This comes as good news to India as the channel will be launched first in India among other Asian countries and in Europe to around 60 million homes. The channel will be broadcasting 200 hours of original UHD content in the factual entertainment or infotainment genre.
UHD content still nascent stage globally
However, UHD content on TV still continues to be very miniscule. This is not only in the case of India but the world over, as the technology though available is still not being used extensively in the production of TV content globally. Except for a few international tournaments such as the FIFA World Cup that took place last year and the ICC Cricket World Cup this year, there is very little content being produced and broadcast in UHD content. These two international tournaments too had only selected few matches broadcast in UHD 4K.
This is even the case in other developed TV markets such as the US where viewers do not have enough content to watch in UHD or 4K despite the fact that they might own a UHD TV and cable setup. Except for some of the content produced by OTT players like Netflix for House of Cards and even by Amazon, not much content is being produced in the UHD format yet. An article on international technology portal ‘Wired’ highlighted that the biggest problem with 4K was the lack of content being produced by broadcasters. The report says that especially with live content there remains to be a challenge in the production and streaming with the large size of the data and even when streaming it requires a 20Mbps speed.
The lack of UHD content is due to the problems many broadcasters face in the production of UHD content which would require special equipment such as new cameras, larger data storage, high-powered mastering systems and finally the most important is the broadcasting space. While the broadcasting space for an HD channel is four times an SD channel feed, a UHD channel required several times more the space of an HD channel. This has even got many broadcasters even in the US thinking about the financial viability of launching a UHD channel. That being said the first UHD 4K channel that will be launched in the US will be NASA UHD that will be launched by the US space agency and was announced in September this year.
HD channel growth a positive sign for UHD
HD channels are expected to grow in terms of adex by 20% to Rs.35 billion in India. The HD subscriber base has even grown to more than 4 million according to the FICCI-Frames 2015 report. While HD subscribers currently account for 10% of the DTH subscribers they are expected to rise by 15-20% during the year.
The ARPUs (average revenue per user) are also expected to much larger for broadcasters as well as DTH players. In fact DTH players have grown their top line by tenfold due to HD channel subscriptions. The ARPUs for HD channels are 3x more than for SD channels. This is the reason that there have been numerous HD channels launched by TV broadcasters during the last year till now. Many of the broadcasters have even generated a lot of ad revenues by having separate HD feeds. This was done really well by Star India Network that created a separate HD feed for advertisers to target HD viewers during the Cricket World Cup.
This gives much impetus for UHD TV channels and UHD content as many broadcasters had a similar view when HD technology came into play. While UHD channels would initially be for a niche audience the ARPUs similarly will be much higher. According to media report the ARPUs generated by UHD 4K channels would be anywhere $3-4 (approx. Rs.200-260) on a per month basis and could go up to $10-15 (approx. Rs.650-1,000).
Andrew Spriggs, CFO, TERN on the launch of the UHD channel in the Indian market said, “With UHD as with anywhere in the globe it will take a little time to settle in, as we saw with HD as well. If you look at the market forecasts they are predicting 41% globally of all TV by 2020 will be UHD TV’s. But in India yes we are going with UHD with the key pay TV platforms, we are also broadcasting on HD on the linear side. But we also see a huge opportunity in India for the non-linear side.”
With regards to the ad rates he said, “Our ad rates will be competitive with the market. Yes we are pioneering new technology. We see a huge value in being the front runner in that because it gives us a strong market position and will use that to drive our ad revenues rather than the effective ad rates per minute.”
Though it is still early days for UHD 4K in India, it is expected to see a growth in the next few years. With the first UHD channel Insight being launched in India we could possible see more TV broadcasters in India taking the plunge to launch their own UHD channels.