TOKYO, Japan - eTradeWire -- While a number of market forces have delayed broad consumer adoption of 4K (UHD) content consumption in Japan, a series of unfolding developments -- including the upcoming Olympic Games in Tokyo and growing interest in premium streaming services from global providers -- is helping to stimulate the – currently - low demand for this immersive content format. As a result, cable providers are rapidly exploring options for meeting 4K demand and doing so in a cost-effective manner.

In this report produced by Technicolor Connected Home, a summary of market drivers is provided along with a review of strategies that can be pursued to most effectively harvest the rapidly growing market for 4K content that can be delivered by cable operators.

Current Market Dynamics

According to analysis from ABI Research and IHS Markit, the number of 4K UHD TVs in households in the Japanese market are expected to grow by close to 19 percent in 2020. By 2023, the number of 4K TVs is projected to grow by an additional 32 percent. Furthermore, 46 percent of set-top boxes sold in Japan in 2020 will be 4K with volume increasing to 60 percent by 2023.

This projected growth rate builds on a strong demand exhibited by early adopters in Japan over the past five years. In 2015 slightly over 600,000 4K UHD TV units were shipped to connected homes in Japan. The market has grown by more than 400 percent to reach 2.58 million 4K UHD TVs in 2019.

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As impressive as these growth figures are, demand in Japan for 4K UHD experiences has been comparatively lower than other developed markets with a 32 percent of population not showing a real interest in having them. The primary reason revolves around the content and capacity conundrum. Most content produced by Japanese production facilities for domestic audiences has been created for 2K consumption. Consequently, 4K content production has been hampered by the comparatively low penetration of connected home devices that have the ability to present 4K programming.

These dynamics however, are in the process of changing and fast. Demand for foreign content provided by global streaming service providers has been strong and is gaining momentum, particularly among early adopters in Japan. A significant portion of this foreign content is streamed in 4K UHD.

The challenge presented by early adopters to Japanese cable operators, however, is that many of these consumers have been associated with the cord-cutter movement that has disintermediated the role of the set-top box (STB).

Tokyo Olympics and COVID-19 Trigger Broader Demand for 4K UHD

The high level of national interest in the Tokyo Olympics promises to significantly broaden the appeal of 4K UHD to non-cord cutters who wish to view the event in an enhanced manner while continuing their existing relationships with cable operators.

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COVID-19 has also emerged as a factor driving increased interest in 4K UHD. The unprecedented emergence of the pandemic has introduced the need for people to avoid large crowds, practice social distancing and remain at home when possible. Faced with the inability to attend sporting events in person, consumers are seeking options for experiencing these live broadcasts of sporting events -- including the Olympics -- from their homes with the higher fidelity that 4K offers.

There is every reason to expect that the increased demand triggered by the Olympics for enhanced 4K UHD format viewing will extend to other sporting and live entertainment broadcasts.

To read more about the specific strategies that cable operators in Japan can leverage to meet the rising consumer demand for 4K UHD content, visit:

https://www.technicolor.com/jp/news/connectedhome/japanese-cable-operator-for-4K-UHD-content/