CCTV hands Harmonic UHD upgrade – how lucrative are we talking?

To say the reaction to Harmonic’s contract upgrade at China Central Television (CCTV) this week was understated would itself be an understatement. China’s largest state TV broadcaster, a long term advocate of the US encoding expert, has rolled out Harmonic’s advanced media server for UHD playout over a footprint of more than 1 billion viewers.

More than anything though, the deal signifies the dominance of US companies in the wider encoding market, in turn marking China’s increased reliance on this technology. It comes in stark contrast to the telecommunications sector right now, with US firms waging war on Chinese vendor Huawei, with western allies following suit.

So, as well as powering most of CCTV’s 50 channels for its total viewership of more than 1 billion people, Harmonic has now been handed the lucrative UHD contract. Harmonic’s extension arrives just a couple of weeks after data was published showing China as leading the global UHD TV market with 30.1 million shipments last year, slightly ahead of the US which recorded 24.7 million UHD TV set shipments in 2018, according to IHS Markit. The research also projects TV sets 50 inches or larger to account for 47% of total TV shipments in China by 2020.

However, from the public information available, CCTV currently only has a single UHD channel, called CCTV 4K, launched by affiliate China Media Group back in October 2018 – broadcasting 18 hours a day on cable TV packages in 13 municipalities and provinces. Presumably the belated deployment of Harmonic’s Spectrum X media server and Spectrum storage – supporting both SDI and IP environments – is due to high demand as well as increasing pressure from China’s telcos. Although our money is on Harmonic technologies being involved from the get-go. We also know CCTV has a number of 4K channel launches lined up from what we understand is a new system from Synamedia, which throws a spanner in the works somewhat.

Prices vary wildly as our research into the encoding sector in the past has highlighted. Harmonic is one of the more secretive vendors, keeping its price list close to its chest. So, we pinged up an easy-to-use price guide from Quencode to get a sense of the size of the deal, calculating $64 per 1,000 minutes of HEVC encoded 4K content. CCTV’s 18 hours of UHD broadcast every day equates to 1,080 minutes, so $69.12 a day, meaning a contract valued at $25,228.80 a year. Yet Harmonic is almost certainly more expensive and of course being a broadcast deal, not streaming, this includes hardware and other fees. We would not be surprised if the deal was worth 10 times this napkin math figure.

A brief revisit to an interview conducted with Harmonic as part of the transcoding report from our research arm Rethink TV reports that many big players like Harmonic and AWS Elemental are not charging any extra for transcoding UHD content, which can be viewed as a seriously competitive stance given the low availability of UHD content. That trend is guaranteed to change though once commitment to UHD increases. But, again, this strictly concerned the transcoding of internet-delivered video content, not broadcast.

CCTV has therefore deployed Harmonic’s Spectrum X media server for reducing the complexity of broadcast workflows by merging multiple capabilities, such as file, baseband, and transport stream ingest, with integrated channel playout. It says that by relying on software-based playout product, CCTV is able to deliver UHD content with efficiency and quality. Then by bringing in Harmonic’s Spectrum MediaCenter storage, CCTV gets a reliable file system and communication management.

This reminded us of a recent UHD milestone in China. Just before the turn of the year, China Mobile, its entertainment content subsidiary Migu and – you guessed it – Huawei, claimed the first instance of a true 4K UHD live broadcast using 5G network slicing. Huawei describes “real” 4K UHD as a resolution of 3840 x 2160 at a frame rate of 50fps, although without HDR we would argue the broadcast lacked some real life-like quality.

But we believe the point is probably to highlight the difference between being mastered in 2K or 1080p then upscaled – otherwise known as fake 4K UHD. With HDR, the unstandardized nature and inconsistency of screen brightness ranges has acted as a deterrent for some, yet Dolby Vision and HDR10+, or something like Technicolor’s HDR Intelligent Tone Management (ITM) technology, have been gaining momentum.

The project beamed UHD signals to the Migu videoconferencing cloud data center for production and distribution through a 5G network slice – established by China Mobile’s Shanghai unit and Huawei. At the same time, it says, the first application of 4K live broadcasting was achieved through this end to end network slice. However, the broadcast wasn’t being beamed into homes, but right back to a 4K screen onsite at the music ceremony.

CCTV’s need for UHD and for advanced encoding capabilities is obvious. It needs to fight back against the Chinese telcos which are becoming very advanced in delivering UHD content, particularly with China’s lead in 5G.