Is Apple TV waiting on H.265 HEVC ratification?

At CES, the pundits worried over the super-high cost of super-high resolution televisions. And then there was the lack of Ultra HD content. But a forthcoming compression standard appears to be the fix, and Apple is already in the thick of it.
Written by David Morgenstern, Contributor

Much talk at the Consumer Electronics Show in Las Vegas, Nevada, earlier this month — both yea and nay — was over the content delivery problems with Ultra HD, aka Ultra High-Definition video. It's the chicken and egg conundrum. You can buy a beautiful set costing about the price of a car (not an economy model), but there's little content. One of the issues is the industry-wide adoption of a newer and better codec to get all that Ultra HD video around the Internets without clogging the drains. Enter H.265, High Efficiency Video Coding (HEVC).

The standard is a real ISO/IEC MPEG standard, and is due for ratification shortly, even in the first quarter of 2013. Codec software for testing has been announced. The standard will support a resolution of 8,192x4,320 pixels and can deliver double the data compression ratio of the current H.264. And unlike H.264, HEVC is also optimized for parallel processing, meaning different parts of the video image can be decoded simultaneously, bringing up the most important parts first, just like your browser.

At the Dreamtek blog, run by a team of UK video production consultants, a recent post on HEVC talks about the technology and its benefits for mobile video. And then there is the leading support from Apple.

Apple has already moved to support HEVC on its iPads — those sold in 2012 are HEVC compliant. As the below image (borrowed from RealNetworks) shows, HEVC is capable of significantly higher definition.

That's particularly interesting in light of Apple's constant quest to deliver high-resolution displays across all its devices, especially in light of the constant claims the company is plotting its way to introduce a dedicated Apple television set.

Will this be among the first available and affordable consumer televisions to be equipped with both Internet access and support for the coming standard? If so, it hints at future plans to offer up content using the standard via the iTunes Store.

Yet video market analysts say hold your horses. Dan Rayburn, principal analyst at Frost and Sullivan wrote on StreamingMedia.com that there are many problems with quick adoption by the conservative and cost-conscious video industry. In a detailed analysis, Rayburn said that 2016 was a more likely target date for widespread adoption.

One can draw a parallel between the adoption curve of MPEG-4 as it gradually encroached into the supremacy of MPEG-2. We believe that while token adoptions--such as incorporation into DVB standards for terrestrial broadcasting--will occur in the short-term, and a few channels may also be launched by 2015, a critical mass of adoption will not begin to occur until at least 2016. History indicates this--even a decade after the launch of AVC, MPEG-2 remains a formidable force in Pay TV (particularly cable), owing to the massive footprint of legacy equipment such as set top boxes and transmission infrastructure that is all designed to work with MPEG-2 video.

Cost also remains an issue--many Pay TV operators in regions like Africa, Asia, and Latin America are choosing MPEG-2 rather than AVC because of the significantly lower cost of consumer premise equipment (CPE) and video encoders. Considering the massive wave of investment in AVC equipment that we have seen in the last two years, we expect at least 5 more years of equipment life before economically stressed broadcasters and service providers will consider systemic upgrades. Any video technology touches many components as it travels from glass to glass, such as cameras, NLE systems, video indexing systems, statistical multiplexers, satellite transponders, head-ends, and (perhaps most importantly) CPEs.

Similarly on the OTT side, transcoders, file formats, streaming protocols, streaming servers, content protection systems, network optimization platforms, and end devices all need to support HEVC before an end to end solution becomes broadly viable. In their continual endeavor to fight commoditization and drive demand through continued technological disruption, vendors of video technology and consumer electronics devices alike are engaged in fast and furious product development around HEVC, with many announcements made already and several more significant milestones expected throughout 2013.

This all sounds like the perfect fit for an Apple ecosystem. Apple wouldn't necessarily be balked by widespread adoption. The company owns the hardware side of equation in parts of its platforms, or could with the oft-rumored, next-gen Apple TV. Its mobile platforms are already compatible.

Apple also has the service side infrastructure: The iTunes Store, which now offers content 119 countries. Apple said that its iTunes business generated revenue of $2.1 billion in its first fiscal quarter. Why not be the first to offer the best video on the best hardware with the best content service?

Apple could also offer the best HD editing workstation--a refreshed Mac Pro. And the editing software for it.

Here's what Tim Cook, Apple CEO had to say on the current Apple TV business during this week's conference call with financial analysts:

Gene, you're asking me all questions I don't want to answer, but let me see if I can find some comments to make that productive. In terms of the product that we sell today, the Apple TV, we sold more last quarter than we've ever sold before, eclipsing 2 million during the quarter. It was up almost 60 percent year-on-year, and so there is actually very, very good growth in that product.

What was the small niche at one time the people loved, it is a much larger number...I have said in the past, this is an area of intense interest for us and it remains that. I tend to believe that there is a lot we can contribute in this space, and so we continue to pull the string and see where it leads us, but I don't want to be more specific.

We're waiting on the "intense interest." Perhaps another way of saying a super codec for super HD content.

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