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August 8, 2021

Op-ed: Is time-to-market accelerating for 8K?

Suppose you are lucky enough to have been sent to management classes, or you studied marketing. In that case, you’ll be familiar with the concept that society embraces new technologies at a seemingly ever-increasing rate. You’ll have heard that the train took around a century from its invention to reach mass adoption. Electricity was a few decades faster, and then when you arrive closer to the present, mobile phones took less than a decade. This digital adoption article shows that electricity took 30 years to achieve a 10% market penetration while tablets took less than 5.

Does that imply the HD-to-4K transition will be more rapid than SD-to-HD and that the 4K-to-8k transition will be even faster?

Hold your horses; it isn’t that simple.

This article from the OurWorldInData website has some fascinating examples of disruptive inventions. Let’s first choose three for comparison. Indeed, comparing landline adoption rates to mobile phones would, for example, be tricky as the infrastructure requirements are so different. Landline adoption could more easily be compared to fiber adoption. However, the paint is still too wet on the data for fiber (it’s a safe bet that we’ll see an acceleration of several orders of magnitude).

So to compare apples with apples and chose something meaningful when thinking about 8K adoption, we can look at the adoption of radio, color TV, and the cell phone.

The penetration rate from 10% to 75% for radio and cell phones took the same six to seven years to join those data points, despite the two technology cycles being 70 years apart.

Hmm, is that telling us that there is no acceleration there?

To make things even more abstruse, color TV, which started with 10% penetration in 1960 (halfway between radio and the cell phone), took twice as long to reach 50% in only 1972.

There are hypotheses to explain all of this, and some are undoubtedly valid. Perhaps people didn’t see the added value in color TV until enough people had one – as with the arrivals of HD, 4K, and 8K, the dearth of content dampened enthusiasm. Such hypotheses could be helpful when thinking about 8K penetration.

I hypothesize that there is indeed an acceleration of adoption rates as new technologies arrive to the market, but that two significant factors have influenced this underlying trend and explain the discrepancies in the previous examples:

  • The perceived usefulness of the technology
  • The investment required to deploy it (independently of a potentially high marginal cost)

Let’s take one third of households as a market penetration that constitutes “success”.

So back to 8K. Before factoring in cost or any perceived usefulness, we could predicate that if HD took about 12 years to penetrate one third of global households from its inception circa 1995 and that 4K will have undertaken a similar 0% – 33% journey between 2012 and 2021, i.e. in just nine years. Then if there were no external factors interfering, we could expect 8K to take no more than eight years to complete the same journey.

The “D-Days” I use are 1995 for HD with the first 720p transmission (the acceptance of rec 709 was two years prior), 2012 for 4K with the approval of rec 2020, and 2018 for 8K as the launch date of NHK’s 8K commercial service.

All three dates are also approximately when regular consumers could buy those TV sets. More research is needed to anchor those dates more securely, but we need to start somewhere.

A penetration rate of a third is a subjectively constructed measure, and analysts will use different dates. For example, if you look at 4K today, a composite rate must be used as there is still almost no live 4K content while most new content produced on SVoD platforms – which is more what people watch today – is 4K. At the same time, it is now challenging to buy a TV below 4K resolution, and set penetration is already well above a third in many markets.

Finally, suppose this was a research report rather than an opinion piece. In that case, we’d also need to go deeper than just resolution, as HD also brought in the 16/9 aspect ratio; 4K is only one part of UHD that includes High Dynamic Range and NextGen Audio, for example.

We see no compelling reason for the glass-to-glass cost increase of the 4K-to-8K migration to differ from previous evolutions. Once proof-of-concept demos are done, the first commercial productions of a newer format can represent a 100% cost increase for the first few months – this was typically the case for HD and 4K and quickly dropped to about 25%, where it stayed for a few years. Then as the newer format becomes the standard, the cost difference disappears. TV panel costs must also be considered.

However, as we progress up the resolution ladder, the perception of added value probably reduces as we moved from SD to HD, now to 4K, and soon to 8K. This negative impact will lengthen the transition to 8K by, let us contend, 20%.

There is also a completely new third factor that needs to be considered. Not least because the pandemic showed that economic growth is no longer above all other considerations. The energy consumption of the 8K ecosystem will probably become a growing factor moving forward, for example.

On the other hand, the pandemic also initiated a significant shift toward cloud-based video production, which will be a positive factor in accelerating the adoption of 8K.

Here at the 8K monitor, we have plans to cover this issue in detail – so stay tuned – but for now, let’s just assume this will further slow things down by 20%.

So, to answer my opening question, yes, time-to-market does accelerate on its own, but other factors influence the process. Since I read Daniel Kahneman’s book, “Thinking fast and slow”, I have lost faith in expert predictions, especially my own. But if I nevertheless had to stick my neck out, considering the D-day for 8K was at the end of 2018, I would expect 8K to reach “successful” market penetration of over one third, by 2029, at the very latest.

Our analyst friends should note that the 8K Monitor would love to report the results of 8K penetration studies from some rigorous analysis.