Rakuten Plans to Be the First Streaming Service to Support 8K Content

On-demand streaming service provider Rakuten TV recently expressed it is planning to launch 8K content later in 2019. Rakuten TV is a rebranded service of Spain-based Wuaki.tv after it was acquired by Japanese e-commerce company Rakuten. It is currently providing on-demand service in more than 40 counties across Europe including France, Germany, Italy, and the United Kingdom. Rakuten is trying to expand its services to compete as a global player like Netflix or Amazon, and has partnered with smart TV manufacturers to integrate its service into smart TV platforms. As part of its strategic plan to expand its business, Rakuten has stated that it is now collaborating with 8K TV manufacturers and content providers to provide movies in 8K format.

If Rakuten launches 8K streaming content in 2019, it is likely to be the first streaming service to provide 8K, which is currently provided by Japanese broadcaster NHK but not offered by any other streaming services. NHK has been experimenting with 8K TV, starting trials in 2015 and successfully completing an 8K broadcast demo in 2016, with the goal of airing the Tokyo Summer Olympics in 8K in 2020. NHK started to broadcast 8K content including movies, documentary and travel content, and scanned and remastered films for 12 hours per day starting at the end of 2018. Korean Broadcasting Corporation (KBS) is also actively working toward broadcasting in 8K. KBS is working with LG for the development of 8K content and displays and trialed 8K with the PyeongChang Winter Olympics in 2018.

Ultra-HD 4K TVs are now effectively a standard for most of the TV sets sold worldwide, while 8K TV sets are just starting to be commercially available in the market. At CES in early 2019, Samsung, Sony, LG and other TV companies introduced a wave of 8K TV sets. Samsung’s 8K TV models are priced from US$5,000 to US$15,000 depending on screen size. 8K TV models from Sony will be available in June 2019, priced at US$13,000 for an 85-inch display and US$70,000 for a 98-inch display. 8K TV sets available today are way too expensive for average consumers; however, we can expect their price tags to decline to an acceptable range in the next few years, just like 4K TV sets did.

8K TV sets are still far from becoming mainstream for many reasons: content availability, content distribution, and cost of TV sets, for example. Except for the aforementioned 8K broadcast initiatives in Japan and Korea, the rest of the world lags in 8K content creation. Unless consumers can access 8K TV content from NHK at present and possibly KBS in the near future, there is almost no other content readily available to take advantage of 8K displays. There is very little benefit for content creators to invest in 8K content creation when there is also a very limited 8K TV installed base.

8K content distribution is among the biggest challenge as bigger files need to be transferred. Large data files means higher data rates are required and data management will be more challenging. It is likely that higher efficiency codecs will be required for 8K content distribution than are currently available. Standardization of Versatile Video Coding (VVC) is ongoing. A VVC Test has achieved 34% bitrate reduction over HEVC. Its final standardization is expected to complete in 2020.

8K TV sets are exclusively targeting affluent consumers and prosumers who are early adopters of the next generation technologies, similar to nearly every other next generation piece of technology to come before. Before price points reach an affordable range for consumers, 8K TV sets sales will still be very low volume in the next couple of years, especially since there are still a huge number of TV households that don’t have a 4K TV yet. In North America and Western Europe, less than 50% of TV households have 4K TV sets. In emerging markets 4K TV set penetration is, expectedly, much lower: on average, less than 20% of TV households. Low 4K TV set penetration indicates that there is still a huge opportunity for the 4K TV market to grow. As the price of 4K TV sets continues to decline over the next few years, consumers in emerging markets will buy 4K TV sets to replace existing HD TV sets. In developed markets, 4K adoption has already ramped up over the last couple of years, which means that most of the TV households in these markets have recently upgraded their TV sets to 4K. These households are not likely to replace their 4K TV with higher resolution 8K TVs anytime soon, so content creators, broadcasters, and streaming service providers can focus on providing 4K content for now. While TV makers continue to supply 4K TV sets to a mass market, they should cooperate with channel partners and find ways to educate consumers about the superior quality and benefits of 8K TV sets. Since pricing is always the key factor in consumers‘ purchasing decisions, hardware makers need to work to bring down the price of 8K TV sets while the content providers prepare for 8K capture, production, and distribution. Similar to how the 4K TV market gained momentum over the past few years, 8K is expected to grow as the entire ecosystem develops in time. ABI Research forecasts that, while 8K TV unit shipments will be quite limited, 4K units will represent more than 50% of total flat panel TV units shipped worldwide in 2019.