Rogers 4K leadership is a double-edged sword

Canada is well positioned to become a 4K leader, but Canadians may end up paying a lot for it.

rogers 4k

Coming soon: the Blue Jays in even sharper resolution.

Rogers 4K

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Rogers chief executive Guy Laurence says his company is now a leader in 4K video, and he’s right. Few other companies in the world are as well positioned to pull off such a big dive into higher-resolution broadcasting.

The Toronto-based company on Monday announced it will air more than 100 live events in 4K – so called for its 4,000 pixels of horizontal resolution, amounting to about four times the sharpness of regular HD – starting in 2016.

All 81 Blue Jays home games will be included, as will 20 NHL games. Rogers will also offer a 4K set-top box to customers and is partnering with Netflix to include the streaming service’s higher-resolution content on those boxes.

With a handful of shows, Netflix has so far been the main source of 4K video for consumers.

Rogers is also in the process of securing more 4K shows and movies – also known as ultra high-definition (UHD) – for Shomi, its own Netflix-like streaming service that is co-owned with Shaw Communications.

All told, that’s a bigger move into 4K than any singular company has announced yet, outside of TV manufacturers. And it’s due to Rogers’ unique positioning.

Owning a sports team, the stadium they play in, the channels the games air on, the cable business that the channels reside on, the internet connection that people stream with and an over-the-top streaming service lets Rogers do things that almost no one else can.

Other broadcasters would be lucky to have control over only a few parts of that chain. The only way Rogers could be in any deeper is if it made the televisions themselves, or perhaps even the couches that people watch from.

“If I employ every single person in that value chain, I can ensure quality,” Laurence said.

On the one hand, the deep integration is a good thing. 4K television shipments are expected to take off this year, growing by 147 per cent to 30 million units, according to Futuresource Consulting. Laurence said the coming holiday season will be “a 4K Christmas,” with an expected 40 per cent of sets sold in Canada being UHD. (To answer the question: yes, you should go 4K if you’re thinking of buying a TV.)

With a major Canadian broadcaster supplying some highly desirable content – and what better timing, given the Blue Jays ascendance in baseball – Canada will likely indeed become an early leader in 4K broadcasting and TV adoption.

But there’s the inevitable downside of all that vertical integration: When one company controls so many links in the chain, it also has the ability to set prices however it wants.

Laurence didn’t talk about this side of the equation. How much extra will it cost, and what will the set-top box go for? No one knows yet.

Regulations also require Rogers to make its 4K content available to other TV providers, but what will it charge them? And will that lead to disputes? Probably, if history is any indication.

It’s a double-edged sword that has been debated for years. Some literature suggests that vertical integration can lead to market foreclosure, which is where one company can determine whatever prices it wants by choking supply to competitors.

Others suggest it can lead to market efficiency, where the vertically integrated company can supply goods or services to consumers at lower prices because of the costs it saves along the way.

Laurence did also announce on Monday that Rogers is rolling out super-fast gigabit broadband with unlimited usage – more on that in a separate post – and he did mention price. At $149 a month, it’s unequivocally expensive. That’s probably a hint of where 4K is going to go, at least initially.

Yes indeed, Rogers is leading in 4K and Canada will likely benefit for it in terms of adoption of the technology, with competitors sure to match its offerings sooner rather than later.

What Rogers ends up charging for 4K will go a long way to determining whether vertical integration of media and communications companies is good or bad for consumers. If anybody’s watching, that is.

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2 Comments on Rogers 4K leadership is a double-edged sword

  1. Canada has never been a leader in anything technological, so I find it hard to believe they will in 4K television. And this is Rogers we are talking about, or course there are going to be astronomical charged for 4K set top boxes and the 4K channels.

  2. Keep in mind the CRTC’s recently announced Wholesale Code will likely keep Roger’s dealing with other distribution partners fair. Those distribution partners might find the technology needed to be pushing 4K video to their customers though is not such any easy task.

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