Even Scripps Networks Interactive, whose lifestyle networks have done relatively well in a down period of U.S. ad sales, considers overseas prospects to be worth the investment.

Evidence of that is the programmer’s purchase of 53% of Polish content producer TVN. After the TVN purchase — amounting to $1.5 billion in cash and assumed debt — Scripps said international sales would make up about 25% of total revenue, an eight-fold increase from the previous year.

Scripps shows have been seen in Europe for years. Its network stable, led by Food Network and HGTV, reaches an estimated 200 million homes in 180 countries worldwide.

But as with other U.S. programming groups, including Discovery Communications and AMC Networks, Scripps has concluded it makes sense to own a presence in non-U.S. markets, where there’s a strong potential for ad growth. Discovery derives about half of its total revenue from outside the U.S., and international revenue is rising at AMC, Time Warner Inc. and 21st Century Fox.

U.S. SLOWDOWN TROUBLING

Scripps reported a 5.3% increase in total ad revenue in 2014, but that was almost half the 9.2% growth of the prior year. Other programmers have experienced flat to single-digit declines in U.S. ad revenue as falling ratings and competition erode the ad base.

Scripps Networks has a plan to increase its international presence, and chairman and CEO Ken Lowe called the TVN purchase “a key pillar” in that strategy.

AMC Networks made waves last year with its $1 billion purchase of programmer Chellomedia. Adding Chellomedia, with its dozens of movie and entertainment networks, pushed international up to 20% of total revenue in 2014, AMC said.

Time Warner Inc. made its push into Eastern Europe in 2009, acquiring a 31% stake in Central European Media Enterprises, a media and entertainment company that operates in six geographical segments — Bulgaria, Croatia, the Czech Republic, Romania, Slovakia and Slovenia. Time Warner has since increased that stake to 49.9% and has steadily expanded its influence outside of the U.S.

Last year, Time Warner invested about $1 billion into international operations, including continued investment in CME, the purchase of Dutch TV production house Eyeworks and the purchase of UEFA Champions League soccer rights in Brazil to bolster recently acquired Brazilian sports network Esporte Interativo.

International revenue amounts to about 44% of the total at 21st Century Fox and 28% at Time Warner. Other big international slices are coming to Viacom (26%) and Disney (24%), per a Discovery analysis of company and analyst reports.

International markets have better adgrowth prospects, though programmers might have to look harder for opportunities. Zenith Optimedia said global ad spending should rise by 4.9% in 2015, to $545 billion; then by 5.6% in 2016 and 5.2% in 2017.

Ad revenue in Eastern Europe and Central Asia should grow at a 5.9% clip between 2014 and 2017, Zenith forecast, versus only about 2.9% in Western and Central Europe.

North America, including the United States, is expected to see ad markets decline from 4.6% growth in 2013-14 to 3.9% in the 2014- 17 period, per Zenith.

Pivotal Research Group senior research analyst Brian Wieser said European ad-market prospects vary by country. In the United Kingdom, TV advertising was up about 6% in 2014, despite a 5% audience decline. France, Germany and Italy have fared worse. And even in declining markets, there are still places to see gains.

Wieser sees the shift of focus outside the U.S as good for programmers, and he agreed they should be pumping money into growth areas.

Sanford Bernstein media analyst Todd Juenger, a big proponent of international expansion, wondered if Scripps wasn’t paying too much for TVN. The price tag represents a 20% premium, he said, which could be hefty given that it appears TVN’s reach is limited to Poland.

‘ONE-COUNTRY PONY’

“TVN appears to be a one-country pony,” Juenger said in a research report. “It is hard to imagine much of TVN’s content is portable.”

The TVN deal could be seen negatively by potential Scripps buyers, other than Discovery, he said.

4K or Ultra HD — the terms are nearly interchangeable — is coming with the inevitability of the next polar vortex.

But, like that vortex, the timing is inexact, which means cable operators have time to tweak their networks and standards bodies have time to revisit what needs to be changed to make sure 4K’s arrival is more aesthetically and financially pleasing than 3D.

That’s because 3D was a bust.

“It’s a broader kind of experience than 3D,” Tom Russell, senior director of standards for the Society of Cable Telecommunications Engineers, said.

Russell collaborates with international standards bodies and within the SCTE as it works to develop specifications to 4K a reality for consumers, programmers and MSOs. Within SCTE, these include constraint documents for HEVC/H.265 adaptations of International Telecommunications Union (ITU) and International Organization for Standardization (ISO) specifications configured specifically for cable.

Most consider HEVC (High-Efficiency Video Coding) to be the key ingredient that makes 4K happen, because its compression schemes lower bitrates and improve bandwidth consumption to the point where 4K can be introduced across existing infrastructure without disruption. HEVC’s advances have been likened to the move from MPEG-2 to MPEG-4.

While essential for 4K, HEVC “floats all boats. It makes HD look better, DSL [digital subscriber line] work better,” Joe Del Rio, associate product line director at Broadcom, said. “Lowering the bitrate even helps the transmission of content wirelessly.”

That wireless part is good and bad for cable. It’s good that HEVC will help cable operators pump content through to 4K-enabled devices when they pop up in all those new WiFi hotspots. But it might also be bad, because it helps cable’s mobile competitors push more aggressively into offering their own broadband-delivered video services.

“It’s a significant increase in the aspect and resolutions that are being deployed,” Jamie Miles, group vice president of content operations at Time Warner Cable, said. “The HEVC codec is significantly more optimized for dealing with video.”

Better Pictures, Better Pixels, Better TV

That’s important because 4K produces lots more pixels — about 4,000 overall, give or take a pixel — compared to today’s HD sets that max out at 2,160. More pixels, though, are only one-third of 4K’s foundational building blocks.

Optimized audio — still in the labs — and High Dynamic Range (HDR) imaging, a set of techniques used to reproduce a greater dynamic range of luminosity than possible using standard digital imaging techniques, are the other two. HDR makes colors pop out to create the “looking through a window” experience so many associate with 4K television.

“4K is about better pictures; it’s about showing off in terms of more pixels,” Mark Francisco, senior director of advanced technology at Comcast, said. “Ultimately, though, the lasting value comes with a better visual and audible experience.”

There’s still work to be done across the entire infrastructure to routinely deliver that experience.

Detractors find fault with 4K because it’s being driven by a consumer-electronics industry unabashedly shilling pretty pictures to sell new, higher-priced devices. HD, these critics contend, could do the job if only the industry would actually deliver video that shows off actual 1080p video.

The problem is that most content is produced and delivered to a cable operation in lesser quality 1080i or 720p resolution; very little source material comes in at HD’s top-of-the-line 1080p/60 (frames per second). Cable operators, especially with HEVC, could produce more stunning pictures with better HD, but their hands are tied by the availability of source matter.

And content owners can’t bear the full blame because their infrastructure hasn’t been built to handle the higher resolutions.

When To Pull The Trigger?

That leaves a do-it-now or do-it-later scenario for all involved parties.

TV sets, like it or not, are being marketed as “UHD.” Smaller devices, even down to smartphones, tablets and laptops and even PC screens are becoming 4K-enabled. Blu-ray Disc players and other set-top boxes are claiming to be able to capture and display 4K signals. Streaming services like Netflix are boasting 4K libraries, and DirecTV has said it will ready to offer 4K via VOD this year, and live 4K streaming sometime next year or by early 2016.

Do-it-now proponents say, with justification, that consumers want the better viewing experience promised by 4K.

“Even when I look at the best HD, the 4K is better,” TWC’s Miles said. “But are we taking full advantage of the HD world? We’re not. I think there are some things that can be done to make that better without a doubt. There are a lot more gallons in the tank when it comes to HD.”

Doing it later appeals to content producers, especially sports programmers that still smarting from the burden of changing SD cameras and other equipment to HD. 4K only promises more expense for what some say is a less-obvious improvement than moving from SD to HD.

For once, cable operators, often bleeding on the cutting edge of changing consumer trends, are not worried about 4K. That’s partially because all the other infrastructure issues suggest a timeline that will allow them to tweak whatever’s needed to welcome 4K seamlessly into their programming packages, and partially because it’s not the major change — visually or technically — that they experienced when moving from SD to HD and presenting both formats at the same time.

4K has the same 16:9 screen ratio as HDTV and runs off the same HDMI connection. HD sets can display 4K content without the discernible — some would say disgusting — difference between HD and SD, and 4K sets only improve HD. A further benefit of 4K will make items such as a user interface look better on a big screen, Francisco said. “Imagine how much text you could put up on that screen,” he said.

Also imagine how much text or other graphic material could be placed on a tablet or a smartphone. Tablets could be the first widespread 4K devices, because their lower price would produce wider mass market appeal than big-ticket big-screen TVs.

HEVC, (Faster) WiFi Are Key

This tablets-first notion, which many dismiss, could strain cable’s current WiFi networks both inside the home and in hotspots. In a nightmare scenario, the cable home network would collapse under the wireless bandwidth demands generated by 4K tablets, smartphones and laptops.

“That’s one reason why HEVC has become important,” Julien Signes, CEO of Envivio, said.

It’s also a reason why organizations focused on maximizing WiFi are closely watching the advance of 4K.

“Today’s Wi-Fi technology would be capable of streaming with a buffer to a 4K device; it can manage very large video with a buffer,” Kelly Davis-Felner, vice president of marketing at the Wi-Fi Alliance, said.

WiGig, a new WiFi iteration targeted for release next year, will make 4K a piece of cake.

 “If Wi-Fi covers your whole house, WiGig covers a room. I’ve seen demos of WiGig do real-time streaming of 4K video beautifully. WiGig is something that people are going to want to watch, because it’s going to be a very easy way to get video onto a screen,” Davis-Felner said.

The threat of hungry wireless devices won’t hold back 4K, most observers said, just as content, seen by some as a pothole, won’t be a problem — eventually.

Sports programmers, for one, are reluctant to move into yet another new format with technology, — including and especially cameras — lagging. That reluctance will evaporate the minute one sports network steps out of line and marches to the 4K beat, observers said.

“They [content producers] are not enthused, but watch and see: as soon as a couple of them start putting out a lot of content the others will follow along quickly,” Daniel Howard, chief technology officer of SCTE, said. “I hope that it won’t take as long as HD to roll out, but it does take a while for the content providers to get their infrastructure fired up and pump out all of their content in the new format.”

When they do, the cable industry will be ready.

“Technically, we’re there,” Comcast’s Francisco said. “We’ve proven the platforms, whether it’s IP delivery or traditional cable delivery. We have set-top boxes now. If the consumer demand is there and the content is there, we can roll.”