UHD Blu-ray Looks to Catch Up

On Nov. 3, the entertainment industry association DEG: The Digital Entertainment Group put out its third-quarter numbers on the home entertainment industry. Perhaps the most relevant data point: As of the end of the third quarter, 9.9 million 4K Ultra Hi-Def (UHD) TVs have been sold in the U.S., up more than 100% from the same quarter of 2015.

Later that day, the Blu-ray Disc Association released its own numbers: As of late October, approximately 80,000 standalone UHD Blu-ray players have been sold thus far, a number that doesn’t account for sales of the recently released Xbox One S console, which features a UHD Blu-ray drive.

Hollywood studios have a vested interest in consumer adoption of 4K TVs, with 2016 marking the first 4K UHD Blu-ray Disc releases, potentially the final physical disc format the entertainment industry puts its weight behind. And nobody’s panicking about the disparity between 10 million 4K sets and less than 100,000 4K Blu-ray players.

“UHD Blu-ray has performed beyond expectations,” said Victor Matsuda, chair of the Blu-ray Disc Association’s (BDA) promotions committee. “Everybody’s happy with what we’ve seen so far.”

It’s early in the product’s life cycle, he stressed, noting that according to data from research firm Futuresource Consulting, 4K UHD TV shipments will increase by more than 80% this year, and should grow another 40% in 2017. By the end of this year, 16% of U.S. homes will have a 4K set. And because American bandwidth speeds aren’t the best in the world, the easiest way to enjoy 4K content will be 4K Blu-ray players, he added. “4K TVs need a sidekick, and Blu-ray is the best way to deliver it,” Matsuda said.

By the time Black Friday hits, there will be eight total UHD Bluray hardware options, if you include the various possibilities for the Microsoft Xbox One S. Both Sony and Onkyo have sets that don’t have a release date yet. And the BDA expects pricing on the models available to be competitive this holiday season.

As for the software, about 100 UHD BD titles will be available by the end of the year, and the BDA anticipates the studios selling their one-millionth UHD Blu-ray disc this month, representing more than $25 million in consumer spending to date.

And yet, while consumers are interested in 4K— it’s the No. 1 thing they’re looking for in TVs, according to Futuresource, beating out internet-connectivity and size—the 10-million 4K UHD sets in homes already lags far behind HDTV household penetration, which now stands at 104.5 million, according to DEG. Regular Blu-ray player penetration is at nearly 87 million households

Don Eklund, senior VP of new format production for Sony Pictures, said the studios are aware that UHD Blu-ray needs better marketing to consumers, and one point the BDA continues to stress to make the format’s case is bandwidth: According to content delivery network Akamai, U.S. bandwidth speeds average out at about 15 Mbps, which is just enough for a hi-def stream, but not good enough for a quality 4K stream with high-dynamic range (HDR). Netflix, for its 4K HDR content, recommends a consistent minimum download speed of at least 25 Mbps, something only about 30% of U.S. internet users have.

“UHD Blu-ray obviously doesn’t have to worry about that,” Eklund said.