Netflix Begins 4K TV Trial

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Netflix Begins 4K TV Trial
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Netflix, Inc. (NASDAQ:NFLX) has started a test run of streaming 4k TV in preparation for a wider rollout, probably next year, reports Carly Page at The Inquirer. Providing streaming 4k is part of Netflix’s long-term plan to become the main alternative to normal television, which will require both strong content and a technical edge over competitors.

Netflix Begins 4K TV Trial

Netflix 4k TV available next year

Also called ultra-high definition (UHD), 4k TV refers to screens with a resolution of 4,000 pixels along the horizontal. 1080p, despite the name, is actually 2k resolution because it is 1080 vertical pixels and 1920 horizontal, so 4k is roughly twice as good as 1080p. No doubt such content looks great, but most people simply don’t have the hardware to appreciate the difference. As with HD TV in the past, there’s no reason for consumers to spend so much money until the content starts to appear, and producers have little incentive create content without an audience. Netflix, Inc. (NASDAQ:NFLX) is trying to push things along by making 4k TV available next year (probably starting with the second season of House of Cards), but pickup may still be gradual.

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“Streaming will be the best way to get the 4K picture into people’s homes. That’s because of the challenges involved in upgrading broadcast technologies and the fact that it isn’t anticipated within the Blu-ray disc standard,” said chief product officer Neil Hunt.

Netflix will dominate with UHD

For investors looking at Netflix, Inc. (NASDAQ:NFLX), this should provide some long-term comfort that the company is actively seeking out disruptive technologies and developing capacity before some agile startup beats them to the punch. The money invested in research now protects the company’s market position and gives early adopters a reason to subscribe. If Hunt is right and other broadcast technologies can’t easily be upgraded to 4k, Netflix could have a huge head start once consumers start demanding UHD.

Netflix, Inc. (NASDAQ:NFLX) has impressed analysts recently, with Baird upgrading the stock’s rating from Neutral to Buy and raising its price target to $420, saying that they are more comfortable with risks associated with the company’s plan, that it has “significant content and technology scale advantages,” and that original content “provides the foundation for long-term staying power.”

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