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What We Learned from 3-D TV’s Early Market Failure

10 February 2013

A few years ago, 3-D TV came onto the market with the promise of transforming how people watch TV. Brands expected that transformation to be as big as the shift from black and white TV to color. It also provided hopes for brands to differentiate their products, gain competitive advantage and increase their profitability. Unfortunately, the reality of 3-D TV did not meet such high expectations.

3-D TV faced three major obstacles: content, price and technology. Even though 3-D Cinema, with movies such as “Avatar”, was extremely popular at the box office, there was not enough 3-D content available for TV users. And 3-D TV had a double price premium: one capturing the cost of shifting to LED, and the other for the cost of the 3-D capability. This resulted in an extremely high price gap when compared to CCFL-based LCD TVs. Most brands introduced 3-D, with LED backlight, as the next generation TV technology.

The third, and most significant, obstacle was that 3-D required consumers to change their behavior in how they watch TV by requiring them to wear a pair of active glass, which initially cost close to $100. In addition, many people experienced problems with “cross talk” – which created some ghosting effect on the image – making it difficult for them to really enjoy the 3-D experience.

After the initial introduction of shutter glass active 3-D technology, which required users to wear active glasses, brands introduced patterned retarder (passive) technology, where glasses were lighter and much cheaper. However, resolution sometimes didn’t meet expectation with the passive glasses, and the total cost for TVs remained high.

The result was that many 3-D TV owners rarely use the 3-D feature after purchase, with some reporting that interest wore off after just a few days of watching.

Complicating matters further, some brands introduced naked eye 3-D TV, where glasses were not required. Unfortunately, this technology had a very narrow viewing angle that limited where the viewer could sit in relationship to the TV to fully enjoy the 3-D experience. With so many choices, consumers were confused about which technology to choose, so most decided to wait it out until prices came down.

The poor adoption rate of 3-D technology was a wake-up call for the major TV brand companies. It forced them to change their strategy away from focusing on selling 3-D TV sets, to selling 3-D TV capability. And they learned they could not charge a price premium for 3-D. This change helped increase the adoption rates of 3-D TV and by the end of 2012, about 20% of all LCD TVs sold had 3-D capabilities.

It turns out that the promise of transforming how people watch TV was premature.

Will 4K follow in 3-D’s footsteps?

Many people expect the newly introduced 4K TV to meet a similar fate as 3-D because like 3-D, 4K TV lacks content and introductory prices are very high. However, there are some major differences.

First, 4K TV does not require any change in consumer behavior, as there is no need to wear glasses. Plus, 4K TV provides greater depth to the picture quality, giving a more immersive experience. And with upscaling technology, consumers can see better picture quality even when watching FHD content.

Learning from past experience, many TV brands are actively working to provide 4K content either through upscaling or through the creation of proprietary 4K content. Still, 4K broadcasts are years away despite Japan’s plan to begin 4K broadcasting as soon as 2014, two years earlier than originally planned.

Panel suppliers and brands are working aggressively to reduce prices. They expect to offer lower cost solutions for Ultra High Definition (UHD) TVs in 2013, and make them available for sizes from 50 inches to 100 inches.

Top panel suppliers such as Samsung, LG Displays, AUO and Innolux are all introducing 4K TV panels. And most of the top brand manufacturers, including Sony, Sharp, Samsung, LG Electronics and Vizio, as well as most of the Chinese brands, are planning to introduce 4K products in 2013. The availability of a variety of products at different price points and sizes will help increase adoption rates. The 4K TV panel, with its high resolution, will also have the added benefit of enabling better 3-D picture quality, which might lead to better adoption of 3-D in the future.

Chances are the lessons from 3-D’s broken promises will lead to a brighter future for 4K.

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