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Report: OTT Will Thrive in 2013; 4K Will Not

18 Jan, 2013 By: Chris Tribbey

Over the top (OTT) video services and pay-TV offerings will do well in 2013, while 4K TVs, or Ultra HD, won’t have a very large impact on the marketplace, according to a new report from research firm Deloitte.

Deloitte’s report also forecasts that global shipments of smartphones will pass 1 billion for the first time.

“Organizations have to carefully consider new ways that consumers receive information and entertainment both at home and on-the-go, and employ strategies that create an incredible customer experience and innovative products amid persistent economic uncertainty,” said Eric Openshaw, vice chairman and head of U.S. technology, media and telecommunications for Deloitte.

For TV, Deloitte estimates revenue from advertising and subscriptions to reach about $400 billion in 2013, with very little evidence of significant cord cutting in the near future.

“Less than 1% of subscribers will discontinue their pay-TV subscription,” the report reads. “That small number of cord cutters will likely be driven by a mix of: macroeconomic conditions, a perceived lack of value of pay-TV, growth in OTT services and changing TV consumption habits.”

Deloitte did caution that its forecast is mostly for North America, which consumes more TV and is more willing to pay for it.

“Based on the trend lines, and if there is no dramatic increase in household formation, it seems probable that the number of total pay-TV subscribers could be flat, or even fall in North America in 2013,” the report reads.

For connected TVs, Deloitte predicts the installed base of smart TVs will hit more than 100 million. For 4K TV, dubbed Ultra HD and the big winner of headlines out of this month’s international Consumer Electronics Show, a lack of broadcast content and the high price tag for sets will keep it from being more than a luxury item during 2013.

“It may be 18 to 36 months before 4K is technically and commercially broadcast-ready, but 2013 should see several significant landmarks in preparations,” the report reads.

Deloitte estimates about 20 models from more than 10 vendors should be available by the end of 2013.

“Demand for 4K will likely grow over the medium-term, fueled by rising expectations of higher resolutions across all screens, as well as larger TV sets and next-generation games consoles,” the report reads.

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