Netflix (NASDAQ:NFLX) has been offering next-generation high-definition content in 4K resolution for months now. In recent weeks, Amazon.com (NASDAQ:AMZN) added 4K viewing options to its Instant Video service. In November, satellite TV broadcaster DIRECTV (NASDAQ:DTV) added 4K viewing to a few of its on-demand channels, and then the company launched a brand new satellite in December to support ultra-high resolution live broadcasts. This week, even Comcast (NASDAQ:CMCSA) joined the party as its Xfinity TV Go service gained 4K-quality versions of a few handpicked shows.
Is this the watershed moment that moves 4K TV from a very slim niche and into American living rooms on a grand scale?
The history of HD
If moving millions of people onto a new technology sounds easy to you, we have very different definitions of the word "easy."
The 720- and 1080-line high-definition video that rules the roost today was no overnight success.
The first HD television set was available in 1998. The first models cost $8,000 and up, thanks to incorporating all new technology with no economies of scale.
But high-def screen manufacturing gained steam while flat-panel options like LCD and plasma matured. High-definition flat panels became the new standard. By 2006, one-sixth of all American homes had at least one HDTV set and many popular TV shows had already switched to shooting in higher resolutions. And the cost of your average 42-inch HD set had dropped to about $2,000.
In 2009, comparable sets had fallen below $1,000, with Black Friday sales going as low as $800. That summer, after several delays, analog TV broadcasts were shut down in favor of all-digital transmissions. Half of all U.S. households owned an HD set (or several) by the end of that year.
Today, I dare you to find a non-HD cathode ray tube at your favorite electronics store. It's all HD, all the time. But it took more than a decade after the first public HD broadcast to hit that sweet 50% household penetration level. That's faster than the two-decade lull between introduction and half adoption of color TV back in the day, but still a long lag.
HD -- the next generation
So where do we stand on the adoption timeline for 4K TVs?
Well, the first sets were 84-inch monsters selling for $20,000 in 2012. In 2013, you could get a 55-inch ultra HD set for about $4,000. Today, just two years after that high-priced debut, you can 60-inch 4K sets for less than $1,000. Even if that's just an extended Black Friday sale, the price drop is much quicker this time around.
Keep in mind that the early adopters really couldn't enjoy their newfound acres of tightly packed pixels. Netflix, Amazon, DIRECTV, and Comcast have only just started to provide 4K services, as noted above. And, nope, Blu-ray discs don't offer 4K viewing either -- though they will by the end of 2015.
So the moment of truth is arriving, and fast. 4K TV prices are plunging while both physical and online viewing options start making 4K content available.
The 2014 holidays won't be the rocket platform for 4K adoption, but you can feel the rumblings. Next year is likely to add much more juice to the 4K conversion trend, with even greater growth in the following couple of years.
The consumer electronics industry has tried and largely failed to sell us 3D TV sets. But the 4K conversion is legit, and is arriving much faster than the original HD adoption did.
And it had better be fast, as 8K sets are already on the horizon.
Anders Bylund owns shares of Netflix. Anders Bylund has the following options: short January 2016 $320 puts on Amazon.com and long January 2016 $320 calls on Amazon.com. The Motley Fool recommends Amazon.com and Netflix. The Motley Fool owns shares of Amazon.com and Netflix. Try any of our Foolish newsletter services free for 30 days.
More from The Motley Fool
3 Things That Can Go Wrong for Netflix on Monday
Momentum is in Netflix's corner, but valuation and growth concerns, and even the upcoming Winter Olympics, can shake things up for the streaming-video pioneer.
3 Things to Watch in Netflix's Earnings Report
The market's biggest winner in the past decade releases its fourth-quarter earnings numbers on Monday.
Why 2017 Was a Year to Remember for The Walt Disney Company
In the future, Disney investors will look back on 2017 as a year of game-changing importance.