Several years out, 1080p physical media will be widely available, and broadcast may eventually move in that direction too. Looking further ahead, some large-screen displays will have 4096 x 2160 resolution (the same as Panasonic’s 150-inch CES prototype), four times that of today’s 1080p “full HD.” 4K x 2K is the standard for digital cinema, so movies will likely be available to feed those displays. On the distant horizon, Japan plans to develop and launch an ultra-high quality 7,680 x 4,320 (33.2 million pixel) broadcast standard by 2015, requiring bandwidth of 180-600 Mbps. Video display technology, and consumer demand for higher-quality video sources, has the potential to escalate for years.

Implications for video service providers are becoming increasingly clear:
For the foreseeable future, providers will have the opportunity to differentiate based on video quality and the number of simultaneous HD feeds.
Providers that over-compress video streams will lose high-value customers. Cable operators must migrate systems off analog to free up capacity for more and higher-quality HD channels.
The public Internet and terrestrial wireless networks won’t have the bandwidth to keep pace with growing demand for higher-quality HD video to feed new displays. Landline and satellite video service providers will continue to be the most significant competitors for high-value customers.
Opportunities to partner with content owners to transform the customer experience, particularly for sports programming, appear almost limitless.

Video service providers will require a program of ongoing network upgrades to remain competitive in high-ARPU households. Along the way, providers will win by targeting investment to the specific geographies where customer demand, competitive environment, and deployment costs maximize ROI.

Jonathan Hurd is a Director at Altman Vilandrie & Company, a pure-play strategy consulting firm serving the communications, media and related technology and investor sectors. Jonathan can be reached at jhurd@altvil.com.