The Gray Report
Our annual update from the man who foresees the future of video, analyst Paul Gray from IHS.
PAUL GRAY, PRINCIPAL ANALYST/ RESEARCHER, IHS TECHNOLOGY: We all know about more and better pixels — the industry’s been talking about it for some years now, and of course we’re now even on the dawn of 8K in terms of broadcasting.
And it’s not just more pixels but better pixels, in that we have deep colour and high dynamic range. This is really being driven not only by the traditional broadcasters like NHK, but also by these new streaming service providers like Netflix and Amazon, who are using this as competitive differentiation.
More pixels, new media?
We have a forecast for HDR and deep colour. Certainly the content’s there. At MIPTV at Cannes [4-7 April 2016], what was very clear is that everybody is commissioning material not just in UHD but with high dynamic range as well. So the quality is going to be there in the material. And we’re now waiting for the hardware to come out.
Outside broadcast sport really really benefits from HDR — the problems that outside sports coverage has in terms of shadow and bright tropical light, the Olympic Stadium in Rio this summer for example — they’re going to be really improved with HDR.
And also if you’re a content creator you can start shooting your content completely differently. You don’t need artificial light. So suddenly you start shooting material with natural light, which could change a lot of the way that cinema is done, that we could see another change in the way that people shoot, like we had with steady cam shots, what, 20 or 30 years ago, that suddenly you could follow the action much more. Again with hand-held cameras shot with natural light, I think it will change cinema somewhat.
One of the things that I learnt recently, talking to people who are shooting 4K material, was that they say people watch 4K material very differently to HD or SD. That you can’t cut between shots so rapidly, because people drink in that detail, and if you keep jumping between shots with so much information people get disorientated, and so you have to shoot 4K material differently.
There’s also a lot more 8K material being shot, and even if it doesn’t end up in 8K TVs it will be noticeably better for 4K broadcasts and content, because you’re
oversampling, and you therefore have that excess of data that you can use for the editing and for use in high quality masters.
The other thing of course that we all know about is that there’s a democratisation of video, that we can all shoot video in amazing quality with things like smartphones which now have 4K cameras — the rate of improvement in smartphone cameras has been absolutely staggering, along with repurposing that camera technology into things like action cams.
With that there’s also the mobile consumption that goes with it, and incredibly, our research shows that the average time people watch YouTube on a mobile phone or tablet is 40 minutes. Obviously it’s not always just one 40-minute piece of content but it’s a 40-minute viewing session. So anybody who said that small screens were just for shortform content, no, consumers are doing something entirely different. Often, of course, that is using smartphones for watching video where you cannot have a bigger screen, like commuting on a train.
The other thing that’s also going on in this cheapening of cameras is that professional 4K cameras that in the past were only for a cinematic production are now being used for television. So $50-$60,000 gets you into professional 4K video cameras, and we’re seeing these Hollywood-style cameras used television content — and we’re seeing that TV content looks more cinematic as a result.
VR immersive viewing
The other one you can’t escape is immersive viewing. Initially we see it being driven by the huge volumes in smartphones — 1.4 billion a year — and the incredible power of smartphone graphics actually makes this possible. However we have a concern, and that concern is that if you’ve tried those smartphone VR headsets, the resolution of the screen really isn’t good enough for a high-quality VR experience, and I think there’s a big risk that this VR market gets poisoned by poor experiences with smartphone-based systems. And I think we have to worry about that.
At the same time it could end up as a gateway into other VR technologies. But when you think about that, then of course what are you going to use this VR for?
Sky News in Europe has experimented with events reporting in a completely different way — 360 degree storytelling, which does enhance the experience. Watching it with a VR headset is very different to watching on TV. It is much much more personal.
Of course the other personal one with VR that has been the holy grail for at least 30 years is gaming. Phones and phone-based headsets are possibly the gateway technology into VR-based gaming — they give people an idea of the experience, they get them slightly familiar with the technology and then you can amaze and wow them with really purpose-built hardware. Our general view — and we like to be cautious — is that VR is not a bubble, but it’s not the next big thing either. The installed base of VR headsets we believe is going to be driven by gaming, so PC-based material, console-based material, very high quality and very high performance.
We believe that the active installed base of VR headsets that are phone-based will be quite small, two or three million, and they’ll get used as a taster to lure people in, but after that they will
fade away again as people buy high quality systems or decide that it’s not for them.
But one of things that’s going to be very critical is content production skills and editing, creating good VR content.
And with that also we see augmented reality. Some interesting start-ups — in particular Magic Leap has an immense amount of money in funding already for retinal projection displays, where you actually superimpose the image directly onto the retina of the eye. Maybe you end up with gaming in real life. Very very interesting technology, lots of room for surprises. Which keeps forecasters and people like me busy.
Global television
If the 40-foot metal box was the symbol of the last round of globalisation, then I guess that Netflix is the poster child for the next one, and its move to 190 countries. It completely changes the nature of copyright, it completely changes the nature of rights and production of content. It is the first global TV network, and we will see an era of new global television networks.
However with that there’s a risk — or an opportunity for some people — that you could get this internet winner-takes-all dynamic. How successful are you if you’re on the third page of Google Search? How successful are you if you’re not on Netflix? It’s a really interesting opportunity but also quite a risk in terms of content. With that also we’ve seen a shift in strategy from classic marketing on a country-by-country basis where they did the first 20 countries, to suddenly an internet.com approach where you throw it out there into the market, you see what happens, and you learn from it. Obviously to move from 20 countries to 190 you can’t do all those individually one by one. So it’s a very different way that they’re going to market their product in future.
The chaotic fringe
And finally all these changes are doing something really dramatic. We’ve seen already in the so-called ‘battle of the curves’ as to how you encode HDR material. Nowadays we’re in a situation where, really, the hardware is left to sort it all out. We can’t even decide now which way round you hold the camera — you see vertical video being shot the other way around, not just because it’s the way the people hold their phones, but with people are building businesses around it.
And so one of the big consequences is that we are entering a chaotic world. The era of standards set by broadcasters is ending — those standards will still exist, they will still have an important part to play, but there will be a chaotic fringe around the rest of it. And it’s going to be up to hardware makers to sort their way through that mess, and that is an immense challenge, I give them my sympathy because it is going to be a complicated world to live in — this chaos will have to be resolved by the client device.