Continued improvements in video display technology highlighted the 2008 International Consumer Electronics Show (CES). Several manufacturers showed 100+-inch displays, with Panasonic’s 150-inch prototype (more than 6 feet high and almost 11 feet wide) winning the prize. Panasonic’s commercially shipping 103-inch 1080p display (MSRP $70,000) appeared frequently on the show floor. The most surprising difference between this and last year’s CES, though, was not the increased size, but rather the enhanced image quality of prototypes as well as production displays. Improvements in resolution, color gamut, contrast, refresh rate and other factors are dramatic, resulting in deeper blacks, more vibrant colors, and smoother motion.

Larger, higher-quality displays will drive continued demand for more superior video sources, particularly in higher-ARPU households. They also create increased opportunity for service providers to differentiate on quality, as well as greater pressure for providers to upgrade their networks to support higher-quality video. At CES, a typical 1080i ESPN live video feed from a cable operator was truly disappointing on displays larger than 60 inches. Service providers that over-compress video streams will increasingly lose high-value consumers who expect better quality.

CES also featured many demonstrations of simultaneous, integrated video applications. Microsoft previewed a NASCAR application with multiple feeds (track video, overlaid statistics and selectable cockpit views) shown concurrently on one display. While compelling, the application and others like it would be more powerful on multiple screens. Imagine football with one display devoted to the field view, another showing player statistics, and others with alternate camera views. Unlike audio, where we can perceive only one stream and technology has tapped out our perceptual ability, video has opportunity for expansion. Humans can scan multiple video images at the same time, and perceive quality substantially greater than that available today.

With prices for similar models declining by more than 40% annually—42-inch HD displays are well under $1,000—we will see rising demand for multiple HD sets throughout the home, and even within the same room. Valuable customers will, therefore, demand a steadily growing number of high-quality, simultaneous HD streams from service providers.

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