8K – The steepening slope

8K pricing seems to be falling off a cliff.

• If CES and Samsung are anything to go by, the 8K product cycle looks set to be a financial disaster as the lack of a use case seems to be causing the price of the TVs to fall far faster than previous generations.
• TVs are like any other piece of consumer technology in that their prices steadily fall over time and then recover sharply once new technological innovation is introduced that users are willing to pay for.
• The problem since the 1080p generation has been that television’s biggest feature (resolution) has been making a smaller and smaller difference to the user experience.
• 8K takes this to another level where the improvement to 8K is indistinguishable to the user when he is sitting at a normal viewing distance.
• The problem is that with each successive jump in resolution, one has to sit closer and closer to the screen in order to be able to appreciate the difference.
• For instance, with a 65 inch TV, one has to sit within 4 feet of the panel to really appreciate the full benefit of 4K resolution and the difference is indistinguishable from 1080p at distances greater than 8ft (see here).
• I have an 86 inch TV and when sitting 9 ft from the screen, the difference between 4K and 1080p is only slightly noticeable.
• The average viewing distance is around 9ft in the USA and I would estimate around 7-8ft in Europe and other parts of the world.
• This is a physical problem that relates to the biological system of human vision meaning that there is very little that one can do to fix it other than buy a bigger TV or sit with one’s nose pressed up against the screen.
• 4K managed to escape this problem by adding all sorts of other enhancements like HDR, wide colour gamut, better contrast and so on which were deliberately made not available on 1080p TVs.
• Consequently, the picture quality on 4K was deemed to be much better thanks to these other features and 4K was able to escape from the fact that one could hardly tell the difference when it came to resolution.
• Fast forward to 8K and the problem is much more severe in terms of noticing the difference but this time, there are no other visual tricks that can be used to improve the picture over 4K.
• Consequently, when the user goes to the showroom or (increasingly now) looks online, he will wonder why he has to pay a huge premium for a feature (8K) that makes no difference to his viewing experience.
• This is already being reflected in pricing where Roku launched an 8K 85-inch panel at CES 2021 (with its streaming box integrated) for a staggering $2,700.
• Samsung has not come down to this level but its 85 inches 8K with all sorts of backlighting bells and whistles is at $9,000 with the 65-inch version at $5,000.
• Given the brutal competition that the premium makers are going to experience from equivalent TV’s at less than half the price, I suspect that this price is not going to hold very long.
• Hence, there are plenty of signs that the price declines in 8K are going to be far faster than they have been in previous generations as there is little to differentiate them from their 4K counterparts.
• This is very bad news for the panel makers and the TV makers, and there could well be another shake-out in this market-leading to greater concentration at the top.
• I would not want to be anywhere near any company that has a large exposure to TV pricing for the foreseeable future.