TV’s New Year’s resolution: The start of the 8K wave

Surmounting the cost hurdle

One major barrier to consumer adoption of 8K screens is their cost—for now. But in the near future, the cost is likely to drop substantially, especially when one calculates the cost per hour of viewing. Combined with TV screens’ appeal as a status symbol, this may be enough to push many consumers to consider an 8K set good value for their money.

8K panels should steadily fall in price

 8K sets are unlikely to enjoy the exact same pace of adoption as 4K sets, which took only seven years from their launch to become the most popular resolution in 2019, when over 100 million 4K TV sets were sold.³² 8K adoption will be slower because of their higher costs and larger size. But the dynamic for 8K is likely to be the same: As price falls, demand will ramp up commensurately.

In 2017, the ASP for 8K sets was more than US$8,000.³³ The following year, it had decreased to about US$5,500.³⁴ By the end of 2021, we expect that entry-level 8K TV sets will be offered for US$1,500 or less, with an ASP of US$3,300 (figure 2). And as prices have fallen, sales have grown. In 2017, about 2,400 8K TVs were sold.³⁵ In 2018, the first full year in which 8K TV sets were available,³⁶ sales reached 18,600 units. In 2021, we forecast 1 million unit sales globally, compared to 550,000 the prior year. Though this is still a drop in the ocean relative to the approximately 220 million sets of all resolutions sold in 2018, the upward trend is clear.³⁷

8K sales are likely to accelerate as the cost differential between 8K and 4K panels narrows. The smaller the differential, the more likely consumers will opt to future-proof, particularly for larger, higher-priced TV set sizes (65-inch or greater). 

Moreover, as demand for 8K TV sets rises, supply is likely to ramp up, further driving down their price. In 2018, the global manufacturing capacity for 65-inch displays (of all resolutions) was just 12 million.³⁸ In 2022, we expect this capacity to increase to support the production of 154 million 55-inch TVs and 37 million 65-inch TVs, with much of the incremental capacity focused on 8K screens. This also parallels what happened with 4K: The number of brands offering 4K TV sets globally more than doubled between 2016 and 2019, from 30 to 70.³⁹  

While lower prices are good news for consumers, the rate of price decline may, in the medium term (from 2025 and on), largely cancel out any increase in revenues for 8K set manufacturers and retailers. Purveyors of 4K sets have already experienced this phenomenon. In 2020, 4K TV unit sales in the United States were expected to grow by 12% to 25 million, but revenues were projected to increase by a mere 2%.⁴⁰

Televisions, including 8K models, can cost as little as 25 cents per viewing hour

Spending US$2,500, or even US$1,500, for an entry-level 8K TV may appear very hard to justify. But with an expected lifetime of seven years and an average usage of three to five hours per day, a US$2,500 set would cost less than a dollar a day and about 25 cents per hour of viewing time, with the cost shared among the entire household. 

To put this into context, many consumers are likely to spend more per year on a smartphone. Multiple brands of smartphones cost more than US$1,000, and their ASP across all markets is about US$380.⁴¹ The expected lifetime for phones purchased in 2020 is forecast at only 2.7 years.⁴² Hence, a household with three people may spend around US$3,000 on smartphones over a seven-year period if each person purchases a US$380 smartphone, and around US$7,800 if each person spends an average of U$1,000 per device. 

Few consumers are likely to calculate the cost per hour of a new TV set. But the volume of usage of a new 8K TV and the range of applications for which it can be used—as well as the satisfaction of showing a new, large, device to friends and family—are all factors that can help justify its purchase. 

New business models may make televisions more affordable

The revenue streams for TV vendors have historically remained largely the same. The manufacturer generates the bulk of revenues at the point of sale, and then waits until the sale of a replacement set to generate further revenues. This model has worked for makers and sellers of television sets, as well as multiple other appliances, for decades. 

However, connectivity enables this business model to change in ways that can make TVs more affordable by monetizing information about usage habits. Rather than collect all revenues in one go, a vendor could trade gross margin at the point of sale for revenues from advertisers and content owners throughout the TV set’s life. This could enable TVs to be sold at a lower price, making the TV set more cost-competitive while generating potentially higher revenue over the device’s lifetime ownership. For consumers, this may mean that they are able to acquire an 8K set for the same budget as a 4K set. The only requirement would be to connect the TV and agree to terms and conditions. 

A connected TV generates information useful to an array of vendors every time it is used. For content vendors, the TV can collect and share information about programs watched, channels chosen, and apps watched and deleted. It could also collect data on what programs are clicked on or, once started, paused or abandoned, which can provide a feedback loop to content creators or content aggregators such as video-on-demand companies. Additionally, a connected TV can serve as a shop front for content providers’ apps. Space on the TV set can be rented to vendors, or commissions collected with every download. And it could be used to show ads distributed by the TV vendor, which could disintermediate TV broadcasters and other entities that have traditionally sold advertising space. 

A connected TV can also collect data on devices in the home to help build a profile of the household based on the quantity and quality of devices owned. It could, for example, be connected to a smart doorbell or to a video baby monitor to be able to show who is at the door or to reassure parents that a baby is sleeping. The ability to collect additional data will depend on each market’s specific data privacy regulations.

This kind of business model is not new, of course.⁴⁵ Though relatively novel to TV, other devices already collect or enable the collection of data useful to advertisers. Considering its success, TV is likely to adopt this model over the course of the 2020s. 

The rising size of TV sets is likely to make a stronger case for 8K 

TV screen size has become steadily and considerably larger ever since TVs were first invented. Between 2004 and 2019, the average screen size of TV sets in the United States increased from 25.4 inches (as measured on the diagonal from the screen’s bottom left to top right corner) to 47 inches. This translates into a steady rise in the average screen size of the installed TV base of one inch per year.⁴⁶

The growth in TV screen size has been enabled by the shift to flat panels, which cost far less per square inch of screen to manufacture than those based on older technologies. Between 2014 and 2019, the average cost per square inch of screen in the United States fell from US$2.15 to US$0.39, an 82% decline.⁴⁷ Concurrently, sales of large-screen sales increased. According to one analysis, the most common size of TV set sold in 2019 in the United States was 65 inches. In the same year, the price of 65-inch sets fell by 25%.⁴⁸ In the first half of 2020, US unit sales of TV sets 65 inches or larger were up by 52% in the first half of 2020, and larger sets over 65 inches were up 77% in the second quarter.⁴⁹

The larger the TV screen, the more likely a customer may be to opt for 8K so as to have a perfectly smooth, pixel-free image. The number of pixels on the screen at a given resolution is constant regardless of screen size; as screen area increases, the number of pixels per inch (PPI) for each resolution declines (figure 3), resulting in a grainier image. On a 36-inch HD TV, its 2 million pixels are packed so densely that the image appears completely smooth.⁵⁰ On a larger HD set, say 55 inches (more than double the area of a 36-inch screen), individual pixels may be discernible depending on the viewing distance. 4K video on a 55-inch screen may be completely smooth, but on a 65-inch screen (1.17 m², 40% larger than a 55-inch screen) individual pixels may start to become visible. On an 85-inch (1.99 m²) or 100-inch (2.76 m²) screen, only 8K content, native or upscaled, may guarantee a completely smooth image. 

The sheer size of an 80-inch or larger TV set might appear to be a disincentive to purchase, as it would be too large to fit in most people’s cars. But online ordering and delivery are ready solutions for this. In the first half of 2019, one-quarter of all TV sets sold globally were bought online; in China, this figure was 50%.⁵¹ Lockdown is likely to have accelerated the move to online TV sales, even if research took place in physical stores. 

Surmounting the comparison hurdle

Many studies have examined consumers’ ability to tell an 8K image apart from a 4K one. These studies tend to suggest that differentiating between the two is hard, with capability varying by genre of content. Nature documentaries appear to benefit most from 8K, perhaps because of the greater range of natural colors that can be displayed with the standard. 

However, the inability to tell 4K from 8K may not matter in the long run. What matters more may be that owners of 8K TV sets enjoy—and derive utility from—the knowledge that their flat panel is capable of showing images in 8K. This phenomenon recognizes that the consumer is not always rational. The rise of the 4K format occurred while most content was available only in HD, and the rise of HD happened while standard-definition content prevailed. Even today, moviegoers may only know that they are watching in 4K if a trailer tells them so: They are not readily able to tell the difference. 

The popularity of 8K TV sets is likely to be boosted by the appeal of very large panels of 75 inches and larger. The larger the TV set, the more immersive the experience. The television is steadily but inexorably transitioning from being the bulky cube in the corner to the slender panel occupying ever larger expanses of wall in ever more intense and vivid colors. 8K and very large panels are likely to become regarded by consumers as one and the same, regardless of the underlying resolution of the content. This is likely to drive satisfaction among owners and envy among visitors to friends’ 8K-equipped living rooms. 

8K’s production end

Though this chapter has focused mostly on the drivers for consumers to adopt 8K, we should also consider the incentives and barriers to creating content in 8K. 

8K film and television cameras have existed for more than five years. Red, one of the first companies in the market, launched its first 8K camera in 2015.⁵² However, little content has been created in 8K to date. One reason for this is because few 8K TV cameras have been commercially sold: For much of the last decade, only prototypes were available. Additionally, shooting in 8K entails considerable incremental costs, such as for additional storage—one hour of raw 8K footage requires more than seven terabytes, or about 122GB per minute, of storage space—as well as for new monitors and cables. 

That said, creating content in 8K also has several advantages that may balance out these current drawbacks. One of these advantages is that shooting in 8K may allow for better quality in postproduction. Downsampling 8K video to 4K often delivers a cleaner overall image than footage originally captured in 4K. This approach also eliminates certain types of artifacts in the final image,⁵³ and may also help with image stabilization, which requires zooming in up to 20%.⁵⁴ 8K capture for 4K masters is likely to be particularly useful for movies with many visual effects (VFX), whose images can be subject to significant postprocessing.⁵⁵

Reframing from higher-resolution images is also easier in 8K. Crops at 4K resolution can be readily created from an 8K file without loss of resolution, delivering smaller pixels and more detail.⁵⁶ For sports, shooting in 8K enables fast-moving subjects from runners to racing cars to be more easily framed in 4K. Indeed, 8K cameras, whose prices as of summer 2020 started from US$4,000, may even change how sports photography is done.⁵⁷ Sports photographers have traditionally relied on ever-faster SLR cameras capable of shooting multiple frames per second, with the hope that one of the hundreds of photos taken will be the money shot. With 8K video, the photographer can film the action at the highest resolution, then pull off a single frame, which will be 33MP in size. Nature documentary makers, whose subjects may move as unpredictably as footballers around a pitch or boxers in a ring, can also benefit from 8K video to generate high-definition stills.⁵⁸ The cost of creating in 12K to be able to downsample to 8K now starts at US$10,000, with the launch of Blackmagic’s 12K camera in the summer of 2020.⁵⁹

Finally, shooting in 8K extends the period in which content could be monetized. Content that is shot in 8K and mastered to 4K for release in 2021 could be rereleased in 8K in subsequent years as more 8K screens become available. This is important because the lifetime of content can be measured in decades. For instance, I Love Lucy, which first aired in 1951, was filmed in 35mm,⁶⁰ enabling remastered versions to be created from the original recordings many years later. An HD remaster of I Love Lucyon Blu-ray was released in 2014.⁶¹

Beyond the consumer to commercial environments

Most 8K content created or remastered in 2021 is likely to be targeted to consumers for consumption at home. But a growing volume of 8K content is also likely to be created for commercial uses such as: 

• Retail displays. Video displays have long been a major weapon for attracting and selling to customers in physical retail. As retail recovers from lockdown, 8K screens are likely to become an increasingly important differentiator, used both to lure customers into a store and to market products and brands. For retail installations, 8K screens can be built from modular panels, and they can also be attached to curved surfaces. They do not need to be 16:9 rectangles. 

• Advertising panels. 8K is likely to become increasingly important for outdoor and instore panels due to its higher resolution and greater color range.  

• Trade shows. Presenters at trade shows need to compete relentlessly for attention. 8K screens, bespoke or based on standard panels, can be one way of attracting visitors to a stand, continuing a decades-long trend of screens being a principal way to draw in potential customers. 

• Live events. Concerts are designed to be spectacular, and a major element in this are the vast, bespoke screens that serve as a backdrop to musicians. Major concerts featuring 8K walls are likely to become increasingly common once live events are able to resume safely. One of the first bands to use an 8K screen was U2, whose 2017 Joshua Tree tour featured a five-story (14-meter) 8K screen that stretched the 61-meter width of the stage, alternatively showing high-resolution visuals and live images of the band. Other stars to feature 8K screens in their concerts include Taylor Swift and Lady Gaga.⁶²

• Office space. Reception areas give visitors their first impression of a company. 8K screens can be used in these areas to showcase a company’s messaging, such as its brand values. Larger companies may be able to readily afford the cost of premium 8K panels costing tens of thousands of dollars.⁶³

8K’s implications for adjacent industries

8K’s spread among consumers can create opportunities for adjacent industries, with the telecommunications industry in particular standing to benefit. Operators should consider 8K TV sets as an opportunity to market higher-speed connections. They could bundle their highest-speed connections—1 gigabit per second (Gbit/s) in many markets—with subscription video on demand (SVOD) services offering 8K content, pairing the highest picture quality with the best broadband connections. However, operators should not expect gains in revenue from increased network traffic just yet. In 2021, 8K is unlikely to have a significant impact on network traffic overall, not only due to the still-niche installed base of 8K sets, but also because most content shown on 8K-capable panels is likely to be in lower resolution.

For their part, SVOD providers offering content in 8K may be able to bundle this content as part of a premium package. They will incur additional costs for storing and delivering higher-resolution content, but some of these should be recoupable by charging a premium for 8K content, as many pay TV (including SVOD) operators already do for 4K and (in some markets) HD content. 

The bottom line

Ultimately, 8K’s core attraction to consumers is as an option on the future of video, and it will appeal to buyers for emotional as well as rational reasons. Owning an 8K screen offers the prospect of enjoying movies and television programming in the best possible quality in terms of pixel density, color range, screen brightness, and sound. It opens up the possibility of showing next-generation 8K video games on the best available screen. It also gives consumers the option of using large TV sets in new ways. They will no longer be just for watching video content, but also could be used to display digital wallpaper or, for home workers, productivity tools. 

Commentators should not dismiss 8K’s prospects on the grounds of irrationality. Similar arguments were made about 4K: The screens would be too big for rooms, viewers would be seated too close or too far from the screen, or few would be able to discern the difference between HD and 4K. These resoundingly logical objections do not appear to have held sway. The majority of new TV buyers will opt for 4K in 2021, and they are likely to increasingly opt for 8K over the coming years. 

For virtually all consumers today, a television set is a necessary fixture of everyday life. A few households will, of course, prioritize bookshelves over TV girth, but these may well be increasingly rare. Besides 8K’s appeal in terms of video and sound quality, the mass market is likely to relish a screen that dominates and defines a room rather than one hidden in a corner, and many will be eager to claim the bragging rights of owning the latest, largest state-of-the art TV set. 8K televisions are eminently suitable for all these purposes—and this will position them to invade the TV market in 2021 and beyond.