For consumers, the switch to 4K is inevitable. But the transition may not be as impactful for manufacturers as they hope. Here’s why, and what consumers really want.
In case you haven’t heard, there’s a revolution in full swing. Or did it already happen? Either way, if you work behind a camera or in post, you’ve probably been affected by the Industry-wide race to 4K. This past winter, RED slashed their prices and introduced an amazing new sensor. Sony debuted two new 4K cameras and a whole production and post “ecosystem.” Blackmagic surprised everyone at NAB 2013 with two new cameras of its own, headlined by the 4K Cinema Camera for $4000. There’s no doubt about it; 4K acquisition and workflow is becoming ubiquitous, and before long, will be the de facto standard for professional video productions.
In the consumer space, the 4K revolution barely registers a blip, lagging well behind professional level adoption. To be fair, the consumer transition to 4K is really more of an evolution, with milestones marked in years, not months or weeks. And it will definitely happen, as it must for electronics manufacturers, who are still smarting from the lukewarm reception of 3D for the living room and the bottoming of the HD market. For these companies, 4K is a long, high-stakes game, played at the billion-dollar table, and one that will likely spawn many more losers than winners.
While it may seem that technology, in general, advances rapidly and springs from nowhere, platform changes for consumer products are much more cyclical and gradual. Example: video game consoles, whose product cycles span roughly a decade. Sony or Nintendo could debut a new Playstation or Wii every year, but it would be foolish and counterproductive. Simply put, video game consoles can’t be profitable without a lengthy life cycle and the support of a constellation of game developers, accessory makers, and most importantly, consumers to buy it all. The transition from HD to 4K will follow the same playbook: early adopters pay a premium to be first, but must suffer through limited content options; as more 4K content becomes available, more consumers will buy-in, lowering prices as retailers phase out HD; prices plummet, drawing in the budget-conscious buyers, who will set-up their new 4K televisions just in time to watch commercials for the glory that is 8K television.
The prolonged period of 4K consumer adoption isn’t ideal for manufacturers, yet it’s at least expected and a necessary evil in growing the lifespan of a new product category. However, there is a more significant problem, a profound flaw in the grand design for your dollars. You see, it’s just, well, I guess I should just say it: 4K is not that exciting.
Consumers want these three things
Articles, essays, entire volumes of books have been written about consumer buying behavior. I’m not going to compete with an army of unnamed theorists, but I’ll instead give you my quick, one paragraph breakdown of what consumers really want. First, consumers are concerned with utility, a specific function that the product must serve. Next, consumers crave convenience. They gravitate towards products that make their lives easier, or offer utility in a simple, less labor-intensive manner. Finally, and most importantly, consumers want, and I mean actually desire, magic. Yeah, I said it, magic. They want a product that makes the impossible possible, inspires new thoughts, actions and behaviors, and elicits an overwhelmingly positive emotional response, often straddling the line between reality and fantastic wish-fulfillment.
Now, for the sake of argument, let’s assume that I’m right. This begs the disturbing question: do consumers really want 4K?
Let’s backtrack and take a look at the major innovations that have redefined the home entertainment experience. In other words, let’s chronicle the history of living room magic. The story begins with radio. Instead of tall tales told by grandparents or tiny words in a book, a little box performed a miracle, pulling in sounds from the air and silence. Music and voices from miles away transported listeners to symphony halls and recording studios, and the mind of the layman struggled to grasp how it was all possible.
Then came television, specifically the black-and-white variety. While consumers took for granted the easy transmission of audio, the ability to send moving images and audio (what we now call video) wirelessly to homes signaled a dramatic shift in consumer behavior, so much so that its inception spurred movie theaters to invest in bigger screens, better sound, and a more robust overall experience.
As the first television generation came of age, new technological wonders sprang forth, starting with the the remote control. Instead of walking that six-to-ten feet to the television set to change the channel, viewers could just hit a button from the comfort of their chairs. Utility, convenience, magic: the remote control covered all three tenets of consumer desire. Black-and-white television gave way to color, replacing grey scale with an array of hues that comprised pictures somewhat resembling the real world. Color was a colossal improvement over black-and-white, but as was the case with the groundbreaking products before it, once color television was adopted by the public, it became the norm and lost its specialness.
The next two magical products forever changed the relationship between consumers and their content. Video cassette recorders granted viewers greater control over their viewing options, allowing people to cherry-pick their entertainment, and even record television when they weren’t at home. It seems like such a simple thing these days, since we’ve spoiled by Tivo and DVRs, but it cannot be understated the enormous affect VCRs had on home entertainment. The change was so profound that manufacturers sought to reign in some of that power. Even the earliest VCRs could record television, but was increasingly daisy chained with another VCR to pirate commercial video tapes. DVD players arrived on the scene, bringing another level of image fidelity and convenience to the living room, but with a noteable exception. The vast majority of all DVD players exclude any recording function, and those with recorders were priced out of the reach of most consumers, up until the final days of DVDs’ dominance as a content delivery platform.
Just as DVDs and improved transmission of video through cable provided the very best picture available, an entirely new invention shook the consumer market to its moorings. The world met high definition, a breathtaking explosion of pixels and clarity, a development so great it changed the very shape of viewing windows here in the U.S. from 4:3 to 16:9, to more closely resemble cinematic aspect ratios. A side-by-side comparison of a DVD playing on a standard definition television and a high definition television displaying pristine video from a Blu-ray drove home what the tremendous difference between old and new.
Yet what was new will one day be old, and as was the case with radio, black-and-white television, and VCRs, so too has high definition grown long in the tooth. Consumer electronics companies actively sought the next great living room innovation, and thought they struck gold with 3D, and for a while, it looked like their gamble would pay off. Hot off the box office success of the 3D spectacle Avatar and its subsequent release to Blu-ray, manufacturers and retailers did everything possible to entice consumers to don 3D glasses on their sofas. 3D in the home is a peculiar case, since the effect is pretty magical, but the product never took off, mainly because it didn’t reach the necessary thresholds for utility or convenience. It worked, to a degree, but consumers complained about viewing angles and headaches, and it’s tough to convince someone to put on a bulky pair of glasses for an experience that’s less than astounding.
Of course, this brief history leads us to the doorstep of 4K, and back to the original problem: 4K is not magical. Think of it this way: HD is to 4K as the first generation iPad is to the current iPad: there’s more resolution, more features, but it’s just a better version of the same thing. Again, 4k’s adoption is inevitable, but it doesn’t fulfill a need already met by a quality OLED HD set, and in order to really enjoy the benefits of that increased resolution, you have to be either closer to the screen (think desktop computer monitor or mobile device) or, in case of living rooms, the 4K television would need to be much bigger than the 37” average for screen size circa 2012. There are numerous experts online who predict an average screen size of 60” or more by 2015, which is definitely possible. However, I find it hard to believe, in this economy, that the change will occur from widespread adoption of 4K in the home. More than likely, the price of very large HD sets will fall to rock-bottom, spurring the increase. It will be just one step in the very gradual transition to 4K.
There’s no doubt about it: 4K will succeed as a consumer product and content platform over time. But there are real dangers for consumer electronic companies as they plan their 4K development, production and marketing strategies. Compared with the high definition rollout, there are many more other players competing for your 4K tech dollars. The mainstays from the standard definition days, namely Sony, Panasonic, and Sharp, have since been joined by LG, Samsung, Vizio, and a slew of upstarts offering perfectly functional HD alternatives at bargain basement prices. Look for this trend to continue through 4K’s lifecycle. Perfect illustration of this point came from little-known Seiki, who is offering a 50” 4K LED television for $1299. Even more surprising: the television received near-universal acclaim from critics and online reviewers. 4K is so new that there’s no real 4K content delivery pipeline available, Samsung and Sony each debuted large televisions priced well over $30,000, yet somehow a small Chinese outfit made a 4K set that’s actually good for little more than a HD set of comparable size and features.
As the lustre typically attributed to well-known brands fades in the eyes of consumers, the market will suffer from prices falling sooner than anticipated, before advancements on the supply side bring production costs down. Lower prices without production savings means smaller margins, and increased competition means it’s more difficult to make up the difference with higher sales volume, leading to lower overall profits for major manufacturers. To traverse these tricky straits, consumer electronic companies must ask themselves the sobering question: how do we differentiate our 4K from their 4K?
If consumer electronics companies, particularly the big ones, want to survive the 4K transition, they must shift their focus from 4K to magic. Too many companies will sell essentially the same product, so the winners will be the ones that somehow incorporate game-changing, awe-inspiring tech into their product offerings.
Video game console makers, as I mentioned, have been playing a similar game for many years, and through hard lessons, enjoy a greater understanding of how to bundle magical products. We recently covered illumiroom, an add-on for the upcoming Xbox 720, that’s basically interactive projection mapping for the home. The device scans your living rooms geometry, then uses that information to project graphics and game backgrounds, effectively extending the experience beyond the boundaries of your television. Let’s consult our checklist: Making the impossible possible? Check. Inspiring new behavior? Check. Positive emotional response? Double check.
There are plenty of magical devices either on the market or set to debut that could augment the 4K experience. The Leap Motion controller, whose product launch has been marred by delays, represents one such option. It’s much like the Microsoft Kinect, but much more accurate, albeit with a smaller functional range. Imagine a wireless version that you could put on your coffee table, giving you the power to control onscreen guides and menus with hand gestures. You’ve no doubt heard of Google Glass, the augmented reality headwear developed by the search giant. Perhaps it or a similar design could expand the television viewing into something entirely different, providing a means of interacting with video content in new ways, or a version that covers both eyes could revitalize the home 3D market. I’ve been touting the dual screen television experience for years, with a smart, internet connected television married to a compatible tablet remote as something of an ideal. This already exists, but it’s an ad hoc process which isn’t always convenient or useful. When television manufacturers get on the same page with content producers, we will see a boon in dedicated dual screen content, and you’ll be hard-pressed to find a television that isn’t bundled with a tablet. Looking towards the future, we will see curved screens, flexible screens, holograms, and social networking via virtual reality headsets, all before we begin the consumer transition to 8K.
A special plea
This goes out to the handful of decision-makers at consumer electronics companies and the Madison Avenue-types charged with crafting ads for consumer 4K: please don’t dust off the same ad with a child captivated by a big, bright, crystal clear television. It played well during the HD transition, but that narrative has run it’s course. Instead, search out a magical product and figure out how to make your 4K product more compatible with it than the other guy. Better yet, research, develop, and incorporate your own magic, something that we’ve always wanted, or never knew was possible. Make us say, “Wow! I want that!” Or the Seikis of the world will eat your lunch.