On June 30, the Ministry of Internal Affairs and Communications released a “notification” to consumers saying that 4K television sets, which have been on the market for several years now, require “special receivers” in order to display 4K high-definition broadcasts. In addition, there are no plans among Japan’s broadcasters to air 4K content until 2018 at the earliest.
4K ultra-high-definition TVs have screens that are at least 3,840 pixels wide and 2,160 pixels high, which is about four times as many pixels as a full (2K) high-definition television screen of comparable size, so the appeal is better resolution and color fidelity.
4K UHD is the current reason home electronics manufacturers give consumers for why they should replace their current TV. The Rio Olympics start next month, and in the past, new television models were promoted in line with the Summer Games to take advantage of new technologies that might be featured in the broadcasts. This time, however, such advertising has been relatively lacking, owing to the fact that none of the broadcasts that most people receive will use 4K technology.
The ministry’s announcement seems to have been made with this fact in mind. Coming more than two years after the 4K push started, the notification is too little too late. According to Nihon Keizai Shimbun’s Market Journal, the number of liquid crystal display (LCD) TVs — which include both 4K and full HD — sold in Japan during the last half of 2015 declined in comparison to the same period in 2014. However, revenues from LCD TV sales increased during the same period. In November 2015, the average retail price of an LCD TV, taking into consideration all makes, models and sizes, was ¥80,800, while in November 2014 it was ¥64,500.
That’s because retailers pushed standard full HD TVs to the back of the store in order to promote 4K TVs almost exclusively, and, of course, 4K TVs are still more expensive than full HD ones. In November 2015, 19 percent of all LCD TVs sold in Japan were 4K, compared to less than 15 percent the month before. However, in terms of sales revenues, 4K accounted for 46 percent, or almost half. The average price of a 4K TV — of any size — was ¥199,300 in November, the first time the average price had fallen below ¥200,000.
What this means is that electronics manufacturers were, for the time being, able to earn higher profits for TV sales despite the fact that less were being sold. But as the average price in November indicates, the price of 4K TVs is dropping, which means these profits are not necessarily assured into the future unless manufacturers can sell more of them.
The communications ministry’s notification could put a damper on that strategy, but only if consumers read it. We recently visited a discount electronics retailer where, by our estimate, about 80 percent of the floor space dedicated to TV sets was given over to 4K units, with no visible notices informing potential buyers about the ministry’s announcement.
We asked the salesman about this and he confirmed that, yes, the government has said that there won’t be any 4K broadcasts until 2018 at the earliest. However, he added that no commercial TV network has committed to this date — an assertion we corroborated online — and that it’s unlikely that any will due to the fact that the four remaining Japanese TV manufacturers — Sharp, Sony, Toshiba and Panasonic — are not in agreement on a broadcast standard for 4K. “Will they be ready for the 2020 Tokyo Olympics?” we asked, since that would be a natural goal for increased TV sales. He didn’t know.
The salesman’s candor sounds self-defeating, but he didn’t think the broadcast issue was a big problem. Stressing picture quality, he steered us to a 4K TV sitting next to a full HD TV, both showing the same program, and asked us to compare the two. For sure, the difference in sharpness was noticeable if you looked closely. He added that since more and more people are streaming content to their TVs today, it makes sense to buy a 4K model because some streaming services, in particular Netflix, are making content specifically for the format. Also, new Blu-ray discs look much better on 4K than they do on full HD. As a capper to his sales pitch, he pointed out that the latest 40-inch 4K Sharp model, which had only arrived in the store that week, was only ¥135,000, or about a third less than the average price had been in November for 4K models.
His logic was obvious: With prices coming down, there’s no reason not to buy a 4K TV, but such logic incorporates the assumption that consumers are always interested in upgrading whatever it is they already have. That market credo may no longer apply to televisions. In 2011, 45 million television sets were sold in Japan when broadcasters switched over to digital. In 2013, only 5.46 million sets were sold. Since then, both Sony and Panasonic have gone back into the black in the TV sector thanks to 4K sales, but according to business magazine Toyo Keizai, the projection for 4K sales in 2019 is 9 million units, which is good but not enough to sustain growth in the long run.
The problem for the industry is a combination of saturation and demographics. Nowadays, only older people watch TV enough to want to splurge on a new one when the technology changes. Since the normal replacement cycle for TVs is 7-10 years, the industry is hoping that all those people who bought new ones in 2011 will be ready for a 4K in 2018. That may not happen, though, if people read the ministry notification and tech blogs.
One aspect of 4K that everyone agrees on is that it only makes sense with screens of at least 55 inches. Anything less and the difference in detail is insignificant to the regular naked eye. Prices are coming down, but they are still twice as much as those of full HD TVs of comparable size. And, of course, there’s still the content issue. In order to take advantage of Netflix’s 4K content you have to subscribe to the Premium plan, which is ¥1,450 a month. Tokyo cable TV provider J-Com also has 4K content, but it costs more — an extra ¥1,300 a month. That’s not including the special box you have to buy to “receive” 4K content. And don’t forget, the industry still hasn’t decided on a standard yet, and when they do, you still might have to buy a new TV to take full advantage of it.
On top of all of this, the truth is that full HD is fine for most people. The difference may be noticeable in the showroom, where they use specially made display content, but at home, watching normal broadcasts on BS or terrestrial stations — and unless you have a huge room with a huge display — the difference will likely be lost.
Then again, there may not be any full HD TVs on sale by 2019.
Yen for Living covers issues related to making, spending and saving money in Japan on the second and fourth Sundays of the month. For related online content, see blog.japantimes.co.jp/yen-for-living.
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