The increasing popularity and adoption of OTT video services are accelerating the deployment of 4K/UHD channels across the world as pay-TV providers look for a tool to stem subscriber erosion and slipping video revenue. A new report out this week, in fact, forecasts that as many as 785 UHD channels will be carried on satellites by 2025.
The latest iteration of NSR’s UltraHD Via Satellite expects that additional leasing revenue generated for satellite companies carrying the bandwidth intensive UltraHD channels will top $280 million annually.
Commercial UltraHD channels have been available for over a year in East Asia, but the new format expands 4K’s geographic reach on linear TV platforms.
By next year, almost all regions worldwide will have UltraHD channels available, and even developing regions will see content by the end of the decade.
NSR expects the plunging price of 4K TV sets to also accelerate interest and demand in the new format, setting 4K TV penetration rates to rise faster than the initial introduction of HD TVs.
“Given the exponential increases we’ve seen on 4K TV shipments, introducing UltraHD channels and packages is a key strategy to retain and grow pay TV subscriber bases in an increasingly competitive environment,” said Alan Crisp, NSR Analyst and report author. “While in the short term DTH, Cable TV and IPTV platforms will offer UltraHD for ‘free’ with existing premium channel bundles, longer term UltraHD will achieve higher revenue streams generated by increasing ARPUs and subscriber levels.”
UltraHD remains a small component of the video market, with around 1% of overall channel counts. But the impact to the bottom line of pay-TV platforms and satellite operators alike is disproportionately large, through both direct and indirect returns.
Short-term ROI challenges remain for broadcasters; however, longer term, UltraHD is expected to pay dividends to pay-TV providers and will form a critical component of most platforms by 2025. Those without it will be viewed the same way SD-only platforms are viewed in the market today.
Increasingly, content owners are offering 4K versions of their fare. Both pay-TV and SVOD services like Netflix and Amazon are looking to take advantage of the improved format, despite bandwidth challenges.
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