Ultra High Definition

Ultra High Definition Which network to deliver UHD content? « Assises de l’Ultra HD » – 8th December 2014  Author: Samuel ROPERT, Senior Consult...
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Ultra High Definition Which network to deliver UHD content? « Assises de l’Ultra HD » – 8th December 2014



Author: Samuel ROPERT, Senior Consultant Samuel has been an IDATE Junior Consultant since 2007. Its main topics relate to the Web architecture (CDN, cloud computing, P2P), the M2M communications and Internet of things, and innovative technologies in TV networks (VoD, HD and 3D). Before coming to IDATE, Samuel worked as a consultant for NPA Conseil (a French media consulting company). He focused on the new TV technologies (IPTV, HDTV, VOD and mobile TV). Prior to that, Samuel worked for TV Breizh (TF1 Group) as a technical video assistant where he focused on video transmission (contribution side) by satellite. Samuel graduated from the French engineering school Ecole Nationale Supérieure des Télécommunications de Bretagne. He holds a master’s degree in Physics and also in Politics from Sciences-Po Rennes. [email protected]

About IDATE and DigiWorld Institute Founded in 1977, IDATE has gained a reputation as a leader in tracking telecom, Internet and media markets, thanks to the skills of its teams of specialized analysts. Now, with the support of more than 40 member companies – which include many of the digital economy’s most influential players – the newly rebranded DigiWorld Institute has entered into a new stage of its development, structured around three main areas of activity: • IDATE Research, an offer of market intelligence publications • IDATE Consulting, time-tested analysis • DigiWorld Institute, a think tank on the digital economy

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Definition of UHDTV

UHDTV – The latest improvement to TV picture quality UHDTV (4K) offers 4 times the resolution of High Definition television (HDTV) Two forms of UHDTV: UHDTV1 (4K) and UHDTV2 (8K), both with an aspect ratio of 16:9

Resolution comparison for different generations

 4K Ultra-HD (2160p) has a resolution of 3840 x 2160 (8.3 megapixels). It is roughly equivalent to digital cinema (DCI) 4K and has four times as many pixels as Full HD (1080p).  8K Ultra-HD, also called UHD-2 or Phase 3 (4320p), has a resolution of 7680 x 4320 pixels (33.2 megapixels) and is roughly equivalent to an IMAX film, or 16 times the resolution of Full HD (1080p).

Forecasts for the launch of the various UHD phases

Source: Les Numériques, July 2014

Three deployment phases The DVB organisation has unveiled a roadmap for a 3-phase deployment of UHD:  DVB Phase 1, with decoders available in 2014-2015. The main limitation here is with the frame rate. The limit is 10 bits/s and 60 frames/second, with 8 megapixel images.  DVB Phase 2, with decoders available in 2017-2018. Frame rates are expected to reach 120 frames/second (HFR).  DVB Phase 3, for better quality with UHDTV2 (8K), composed of 33 megapixel images. The first decoders will not be available before 2020. Source: DVB (Digital Video Broadcasting)

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Ultra HD features UHDTV also provides an immersive user experience

UHDTV provides an immersive experience  This will require using a combination of advanced image and audio immersive technologies and new infrastructures throughout the technical chain.  Viewing angle is improved: 60° with UHD compared to 30° with HD  Higher Dynamic Range (HDR) technology should help to improve the image.  Encoding will increase by 20% with this technology.

This diagram shows how viewing angles and distance from the screen vary, in SD (left), HD (centre) and Ultra HD (right) Source: Eutelsat

Better motion rendering • 50 frames per second seems to be not sufficient Motion rendering at 50 frames per second

• UHD requires a minimum of 100 frames per second for smoother motion rendering. • This can be made possible with HFR (Higher Frame Rate) technology. This provides more fluid motion and details that may not be recognised in images that have lower frame rates. • Again, the encoding is expected to increase by 20% with this technology. Source: Envivio

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UHDTV – H265 as a pre-requisite Specifications and impacts of HEVC

HEVC - H265 video compression on the roadmap Since early 2013 an ITU-approved video compression standard HEVC deployment has not been expected before 2015. Encoding rate progression with • Positive impacts on bandwidth costs (bandwidth cost savings) • Increase of the IP video addressable market (lower video bitrate extends coverage).

• Higher video quality for the same spectrum use • UHDTV

 50% compression gain in theory, 30% expected at first (in 2015).

Source: PC World

• Main drawback: need for end-device replacement • UHD will definitely require HEVC implementation Differences between formats

Source: Teamcast 6

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UHD: impacts on the different networks

Is terrestrial TV still in the game? French TV channels over DTT network

Reminders

 Still a limited spectrum resource  Network of the free-to-air TV  Lots of non HD channels distribution Not the HD network Main trends

 The scarcity of terrestrial development of DTT service.

frequencies

is

hampering

further

The results of the debate on the second digital dividend will be key for the terrestrial TV industry.  The hybrid broadcast broadband solution (HbbTV) should better reposition the network in the free-to-air (FTA) TV distribution landscape - DTT + OTT delivery has been a well-adopted option

Source: RegardTV

- New SVOD OTT services lower the consumer willingness to pay for TV services, which could in turn favour FTA DTT packages. Compatibility of cable with UHD using HEVC, DVB-C vs DVB-C2 Main improvements

DVB-T2 standard  Currently being implemented  Improves the performance in bit rate per frequency by 40%.

8 MHz frequency Standard Modulation Bitrate per frequency Nb of HDTV channels with H264 Nb of 4K channels with H265 Source: IDATE

Modulation change  from 16 QAM to 64 QAM (or more) capacity per frequency optimisation 8

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DVB-T 16 QAM 64 QAM 18 24

DVB-T2 (+40 %) 16 QAM 64 QAM 25 34

1

2

2

4

1

1

1

1-2

Cable situation Spectrum allocation

Reminders A cable network consists of: • a fibre optic core carrying the signal from the network headend to distribution nodes for serving residential and business customers • a 'last mile' of coaxial cable from the distribution nodes to subscribers' STBs

Major improvements Transition to a new broadcast standard: implementation of the latest standards like DVB-C2. • Increased capacity per frequency (expected minimum gain of 30% compared with the DVB-C generation)

Source: Excentis

• However, further gains are not expected in the field of cable standards. More efficient modulation: • Bit rate per frequency gains are possible by changing modulation. For example, a frequency of 8 MHz over a cable network can get 38 Mbps with 64 QAM and 50 Mbps with 256 QAM. • This upgrade would thus relieve the limitations somewhat on available frequencies. Quadrature amplitude modulation is widely used in the downstream on European cable networks. Compatibility of cable with UHD using HEVC, DVB-C vs DVB-C2 Frequency: 8 MHz Standard Modulation Bitrate per frequency Nb of HDTV channels en MPEG-4 Nb of UHDTV channels en HEVC 9

DVB-C 64 QAM 38 3 1 Source : IDATE

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DVB-C2 (+30 %) 256 QAM 50 4 2

64 QAM 48 4 2

256 QAM 63 5 2

Cable evolution: migration towards IP Several forces are pushing cable companies to transition to an all IP system:

Cable companies’ migration to all IP services

• distribution is fast becoming increasingly complex and operators need to be able to serve a growing variety of devices, both inside and outside the home; • hybrid distribution systems are complex and costly to run; • the cloud technologies that are being gradually deployed are more in sync with an IP environment. • the various merger and acquisition deals with IP wireline network operators makes the transition a more natural move for cablecos.

Current use of DOCSIS 3.0

Source : Cisco, based on Bright House Networks, 2013

Comparison between different DOCSIS standards

• Comcast is the leading fibre network in the US with 20,7 million subscribers FTTx/D3.0 at end-2013

Development to DOCSIS 3.1 Commercial deployments of DOCSIS 3.1 are expected between 2015 and 2016.

Source : Cisco

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IPTV over managed network IPTV: the last-mile issue

IPTV architecture

Operating principle • Multicast used for linear TV channels up to the DSLAM • Unicast between the DSLAM and the STB (last mile)

• Unicast used for non-linear services • 1 to 1 delivery • No real economics of scale

 Advantage: almost infinity of channels delivered on the backhaul

Last mile: differentiation between DSL and Fiber xDSL: the longer the distance to the DSLAM, the lower the data rate  The higher the encoding rate, the fewer the eligible household coverage  Ultra-HD requires very high download speeds, which only homes close to DSLAMs have access to (a small minority). xDSL performance (Mbps)

Fiber: guaranteed symmetric speeds of about 100 Mbps

90 80

Impacts on Telcos strategies

70

Telcos are likely to offer Ultra-HD content with different bit rates according to the network infrastructure used

60

• Encoding rate over xDSL network: 10-12 Mbps using HEVC

40

• Encoding rate over FTTx network : 22-24 Mbps using HEVC

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30 20 10 0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8 3.0 3.2 3.4 3.6 3.8 4.0

Fiber as the high quality video network

Length in km

• Driver for subscription ADSL 2+

• Need for quality differentiation

ADSL

VDSL CURRENT

Source: IDATE in Ultra High Definition, September 2014

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OTT distribution landscape Open Internet vs. Managed IPTV

OTT distribution refers to Open Internet Operating principle  Unicast everywhere (linear and non-linear services) - 1 to 1 delivery - No real economics of scale (unlike broadcast)  Best effort delivery only (no QoS) Options for distribution  Transit: to access to the Internet - pricing based on a Mbps basis  Peering: to access to the peer network - Free but depending on the telco peering policy and need for for equipment investment (CAPEX) - Paid peering otherwise  CDN: - Edge servers, closer to the user - Highest QoS solution for OTT delivery - Expensive solution also based on traffic delivered So, whatever the solution, UHD traffic will be more expensive (higher bitrate)

 CDN was seen as the HD network CDN and Telco CDN should be the UHD network over open internet

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Source: IDATE

CDN architecture

OTT distribution landscape Distribution costs are not declining as fast as the traffic is growing Bandwidth costs are now skyrocketing

Transit price evolution

OTT economics still uncertain  Catch-up: weak monetization (lots of SD delivery)  SVoD: higher quality should be an appeal for subscriptions  VoD: a mark-up should be set  UGC: even weaker monetized Ad-based revenue will represent 50% of total OTT revenues in 2018 (40% in 2013)

OTT suffers from the same problems as IPTV…  xDSL coverage  Fiber adoption … BUT some advantages of the OTT delivery  HEVC quite easy to integrate  Adaptive bitrate (ABR) streaming is gaining traction; (adapts video encoding to the actual bandwidth of the user) - But provides a decreased UHD quality on TV (primary goal) - Interesting for tablets

Source: Telegeograhy

Adaptive bitrate streaming

Distribution on connected TVs will require content to be encoded with very high bit rates (> 15Mbps).

Source: AT&T 13

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OTT players looking to differentiate with the quality upgrade of UHD OTT leaders are focusing on 4K in their strategies Despite still having limited audience potential, OTT leaders are among the first to embrace UHD as this positioning meets several strategic objectives:  Asserting leadership in the face of traditional channels and pay-TV players, which have previously been the ones associated with technological innovation and quality content.  Establishing themselves as possible partners for consumer electronics players, who need compelling content to help promote their UHD television sets. However, the eagerness of ISPs to cap speeds for broadband users could hinder OTT players' ambitions.

Netflix case study: aiming to become a technology leader

House of Cards in 4K

 One of the international leaders of 4K content distribution.  Season 2 of its hit drama House of Cards was released in UHD/H.265 in May 2014 in the U.S., as well as a series of documentaries.  The range of content expanded in mid-June with the airing of 62 episodes of another flagship series Breaking Bad, remastered by Sony Pictures Entertainment, as well as some feature films (including The Smurfs 2, Ghostbusters and Ghostbusters 2), all packaged in Sony Pictures' IMF standard (Interoperable Master Format).

 The service is designed for UHD television sets.  Expected 3 billion USD investment in 2014 in original content and 6.2 billion USD over the next three years.  Currently no subscription rate changes for accessing UHD 4K content.  Ultra-fast broadband connection of at least 20 Mbps recommended for users who want the best UHD experience.

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Source: Netflix

Is fibre expansion the solution for telcos ? Fiber enhances TV experience …  Higher capacity - TV consumers access to high quality video streams (UD, Ultra HD & 3D TV) for both linear and non-linear services - Simultaneous streams for both IPTV and OTT offerings.  Better QoS (latency)

Limited service coverage (still focused on urban areas)  Telcos have developed hybrid broadcast broadband solutions - Network combination - IPTV + DTH: Orange, Deutsche Telekom, KT - VOD + DTT: BT Vision, Telecom Italia  AT&T (FTTN) has agreed to acquire DirecTV for 48.5 USD billion.

Ranking of European countries by number of ultrafast broadband subscribers (million) and proportion of the regional ultrafast broadband subscriber base (%), at end-2013

# 1 2 3 4 5 6 7 8 9 10

Countries End 2013 FTTx share Main technology Russia 8.9 22% FTTH/B UK 5.2 13% FTTx/D3.0 Spain 3.5 8% FTTx/D3.0 Germany 3.1 8% VDSL Switzerland 2.2 5% VDSL Belgium 2.1 5% VDSL France 2.1 5% FTTH/B Netherlands 1.8 4% FTTx/D3.0 Sweden 1.7 4% FTTH/B Ukraine 1.3 3% FTTH/B

Source: IDATE, World FTTx market, July 2014

Limited adoption worldwide 5% penetration in BB households in France in late 2013



Should reach 30% in 2018 on a global basis

Growth of fixed broadband subscriptions and part of FTTH/B, 2013-2018

Fibre migration (combined with non-discrimination rules) also raises questions about IPTV sustainability  Content providers may be able to circumvent telcos and distribute directly  Even without CDN, the available bandwidth may be enough to allow the development of video offerings on TV through connected TVs  Telcos may open the gate to all OTT services (especially based on video) they cannot monetise.  Telcos and cablecos: 45% of total VoD and sVod revenues in 2013 (47% in 2018)

Million



900 800 700 600 500 400 300 200 100 -

35%

30%

17%

20%

22%

25%

20%

10%

5%

0%

2013

2014

2015

Total BB world (million)

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28%

15%

Source: IDATE, World FTTx market, July 2014

15

25%

29%

2016

2017

2018

% of FTTH/B subscribers

Broadband situation Ultra broadband networks in Europe Cable (over IP), IPTV and OTT networks seem to be very good candidates for distributing UHD content BUT subscribers will need access speeds of over 15 Mbps (IPTV) and over 20 Mbps for OTT.

Source: European Commission

Source: European Commission

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Satellite distribution landscape Distribution of DVB-S/S2 use worldwide in 2013

Technical improvements Traditionally based on the DVB-S standard Introduction of the DVB-S2 standard in 2005 increase the capacity of a transponder (36 MHz equivalent) from 38 to 50 Mbps Current work introduction of DVB-Sx (or S2 extensions) Increase transponder capacity by 20–25%, about 62–75 Mbps. This will have a positive impact on the number of channels delivered

Frequency Standard Bitrate per frequency (Mbps) Number of UHD (4K) channels

17

36 MHz DVB-S2 50-60 2-3

Source : IDATE in Ultra High Definition, September 2014

Gains from DVB-S2

36 MHz DVB-Sx (+25 %) 63-75 3-4

Source: SES Copyright © IDATE 2014

Satellite is particularly well positioned... ...for broadcasting high-quality UHD to a wide audience Total UHD channels broadcast by satellite per geographic region, 2014–2018

A niche market until 2018

 Broadcast tests of UHD content via satellite have been taking place in recent months.  The first commercial UHD TV channels are expected as early as 2015 in mature markets.  UHD will remain a niche market with an average annual growth rate of 140% between 2015 and 2018.  The global UHD broadcast market will be worth around 50 million EUR in 2018.

Number of transponders used for broadcasting UHDTV services and UHD market valuation, worldwide, 2014–2018

Source : IDATE in Ultra High Definition, September 2014

Significant opportunities for growth in demand for satellite capacity in the longer term Market growth is expected to accelerate after 2019 given that:  A significant proportion of households will be equipped with a UHD TV set.  Content producers will have upgraded all of their production chain so they can offer plenty of content.  Pay-TV operators will have deployed UHD-compatible STBs en masse. Source : IDATE in Ultra High Definition, September 2014

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Comparison of various fixed networks' positioning for UHD distribution

Fixed broadcast network positioning compared Quality/UHD bitrates with HEVC

Satellite

Cable

DTT

IPTV

OTT

20 Mbps

15 Mbps Fiber: 22-24 Mbps

20.. ? 2016

2016

6 Mbps on tablets 15 Mbps for connected TVs



• Very advanced fibre deployment • Focus on quality

• Non-IP capacity still limited • STB replacement

-

• Coverage • Penetration • Free-to-air network

2016

15 Mbps

xDSL: 10-12 Mbps Fiber: 22-24 Mbps

• Very large capacity • Focus on quality • HD network

2014

• Almost non-existent capacity

• • • • • •

Provision of HEVC UHD content offering Provision of HEVC UHD content offering Quality Transition to IP

• Provision of HEVC

• Spectrum allocated to HD at first? • STB or TV replacement

• UHD content offering • Complete implementation of DVB-T2

• Unlimited capacity on backhaul • Focus on quality over fiber

• Lower quality over ADSL

• Provision of HEVC

• Focus on quality over fibre • No STB replacement required • OTT players offering premium content (Netflix)

• Lower quality of service lower than other networks • Speed more important for connected TVs

Source : IDATE in Ultra High Definition, September 2014 20



STB replacement required Coverage over urban zones

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• Still low penetration rate of • UHD content offering fibre and focused on urban • Fibre adoption areas • STB replacement

• UHD content offering • Fiber adoption • Quality of service • Adaptive bitrate technology

Fibre and satellite ideally positioned for broadcasting UHD Quality will vary between the various broadcast networks • Content image quality and therefore the encoding will be the key differentiation factor. • Boasting a large broadcast capacity, satellite operators are currently particularly well placed to broadcast a wide range of UHD content to many viewers, along with optimal image quality. • The quality of UHD content over fibre IPTV (managed network) should be just as good, but accessible to a much more limited number of homes. • As for OTT delivery, with cutting-edge players like Netflix already producing 4K content, this network should be one of the pioneers of UHD, at least for those with access to fibre speeds providing adequate bandwidth. Positioning comparison between different broadcast networks

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Source : IDATE in Ultra High Definition, September 2014

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Key takeaways Fibre and satellite ideally positioned for UHD distribution Next step: Phase 2



Introduction of HDR with a consequence on bitrate as well : +20%



Introduction of HDR with a consequence on bitrate as well : +20%

 The impacts will be even more stronger

What about 8K?  the conclusions for 4K should be reinforced UHDTV on mobile ?



Increased resolution of the camera and display



Interrogation around LTE capacity to handle the traffic overload



New mobile SoCs to deliver increased computing performance and memory bandwidth required



Involved players like Qualcomm

4K display technology provides consumers with richer mobile experiences

Source: Qualcomm 22

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