Every New Year brings a fresh batch of Industry forecasts. We at RedShark are not immune to this phenomenon, as evidenced by Andy Stout’s Almanac and Phil Rhodes’ provocative predictions. These are two great articles, definitely worth a read, but I would be remiss in my duties if I didn’t join the fun. Andy and Phil covered the bases for video professionals in 2013. I’ll instead cast my gaze down the line, towards the consumer. What will be the prevailing consumer habits, and how will it affect the video landscape? Let’s find out...
Major Networks Lose All Relevance
When I say ‘major networks’, I am speaking specifically about the traditional, terrestrial U.S. broadcasters, namely the Big Three: ABC, NBC, and CBS. I’ll give Fox a special exemption for the time being, as Rupert Murdoch’s network is much more expansive and diverse and, therefore, better able to weather shifts in habits and sentiment. We’ve witnessed a decades long erosion of the Big Three’s influence, as they steadily lost viewers to cable, pay, and now online distribution portals. The only thing buoying these once great-brands are the massive deals in place for sports programming, yet even that content finds its way increasingly to sister-cable outlets, the watershed moment being the extinction of the ABC Sports nameplate in favor ESPN-branded coverage airing on its parent network.
This will almost assuredly sound cynical, and a little mean, but when I look at the channel lineups, it seems to this observer that the target demographics for the Big Three are 12 year old girls and senior citizen shut-ins. If the most important topic of the day for network execs is ‘How do we keep Dancing With The Stars from getting stale’, then there is a huge problem. In 2013, look for this problem to get worse. The Big Three will double-down on tepid programming, retreads, and low-risk entertainment. Consumers will unconsciously respond by watching more cable television, which has become the last bastion for quality, sustainable episodic programming, or going online for Netflix or videos of ‘kittens falling over’ (much thanks to Phil Rhodes for that phrase). As the living room television increasingly becomes just another screen, and all content flows from the same source, you can almost hear the nails being driven into the coffin of the Big Three.
Dual Screen Home Experience Takes Off
Look for television manufacturers to focus even more intently on creating software-based ecosystems to drive hardware sales of screens, large and small. In particular, a certain South Korean company (I’m looking at you, Samsung) will anticipate Apple’s next foray into the living room and will further integrate Android (or maybe Tizen) into dedicated, wi-fi-only home tablets to enhance your domicile. These tablets, much like Google’s plan to include the Nexus7 for Kansas City’s Fiber subscribers, will function as smart remotes for your television and every other Android capable appliance, giving you the ability to control your washing machine’s spin cycle while you add to your DVR-cloud and tweet what you had for lunch. Of course, in order for this prediction to come to fruition, people will have to buy these tablets and compatible televisions (and toasters). What’s the easiest way to make this happen? Bundles! Count on Samsung, Apple, and/or Google to incentivize the purchase of televisions and tablets in the same shopping cart, often in the same retail box, and prime consumers for a budget-friendly leap to the future of home entertainment.
4K Misses Its Mark
The Industry’s projections of 4K consumer-level adoption, admittedly modest, will be an overestimate. The only real drama is how much will sales disappoint. Yeah, I know, we at RedShark touted December 2012 as ‘4K Month’, but the wants/needs of video professionals and consumers, in this case, represents a gulf. The benefits of 4K acquisition and post-pipeline drive professionals’ desire of the burgeoning standard. Four-times the pixels of 1080 HD, cleaner, virtually noise-free images, and eye-popping latitude are on every DP’s wish list. In fact, 4K has since been surpassed by 6k with 21 stops of dynamic range, with 10-15K not far behind.
For consumers, however, 4K currently represents an extremely limited content ecosystem, unless you want to pay $25,000 for Sony’s 84” UltraHD (4K) behemoth and believe the promise to make its entire library of 4K content available as part of the ‘bargain’. Sony will debut the Playstation 4K in 2013, which will likely be future-proofed with UltraHD capabilities. 4K video players and televisions will up-res standard HD content to fill all those extra pixels, allowing backward compatibility and creating a bridge for content until the 4K ecosystem matures. Cost will be the biggest initial stumbling block, with even the smallest 4K sets running in excess of $4,000. To truly appreciate the difference between standard and UltraHD televisions, your screen size should surpass the 50-inch barrier, pushing your purchase price over $8,000.
Stinging from 3D
I understand that consumers are buying larger and larger televisions. And manufacturers, still stinging from the lukewarm sales of 3D televisions, are looking for the next big thing, so this all feels like kismet. However, while people yearn for bigger screens, there’s a hard, physical limit to just how big televisions can and should be. Optimal viewing distances increase with screen size, and, last time I checked, homes aren’t getting much bigger; and the trend of people swelling urban epicenters will undoubtedly continue, as it has over the last century-and-a-half. More people packing into smaller areas means the average size of homes will necessarily decrease, along with the space for living room screens. In addition, when compared with the difference between SD and standard HD, the step-up from Blu-Ray to 4K isn’t as jaw-dropping. UltraHD will be a limited market for the next 5-10 years, until manufacturing costs drop to facilitate retail price points at 10% of current UltraHD prices.
According to independent research firm NPD Display Search, around 154,000 4K sets will be sold in 2013. As someone who enjoys the occasional bet, I’ll take the under on that figure. Any takers?
U.S. Consumers Spend More And Demand More
At some point in 2013, some brave pundit will pore over the country’s economic statistics, analyze key indicators, and proclaim, “The recession is finally over.” Sure, by definition, it’s been over for a couple of years now, but this year it will feel over for most. A new day, a turn of the page, and whatever other cliche you prefer - once again, U.S. consumers will spend to their hearts’ content. But the yesterday’s frugality won’t fade away. Instead, prudence will inform buying behavior. Sales will undoubtedly rise, yet people will enter the retail space better informed, savvier, and a bit hardened from the struggle of the last few years. ‘Value’ will be the mot du jour, whether we’re discussing flat-screens, tablets, or entertainment products. It’s just something to consider if you plan on engaging consumers in 2013...