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Deluxe Entertainment Services Group expects that 2018 will be “the year of 4K for a lot of our operators” in the on-demand arena, according to Jeremy Morrison, VP of sales engineering. For now, the Deluxe customers that Morrison deals with are focused on HD, in part because “you’ve got to use every trick that you can to start getting those 4K streams that are compressed enough” to be deployed, he told a media conference in New York May 16.

But Deluxe customers are expected to increasingly shift to 4K next year, he said, predicting that may give way to 8K or even 16K five years from now. Deluxe on-demand customers are, for now, delivering content using the Advanced Video Coding (AVC) compression standard for HD and High Efficiency Video Coding (HEVC) compression for 4K, Morrison told the Media & Entertainment Services Alliance (MESA). But the percentage deploying on-demand content in 4K is just “peanuts” right now, he said.

Deluxe distributes content to companies “like Netflix and iTunes,” as well as AT&T, that’s in 4K, he said, but told us that his on-demand division of Deluxe “it’s still mostly a testing environment” for those companies streaming 4K content.

Asked what’s standing in the way of more companies streaming 4K right now, he told us: “The challenges of content availability are just starting to be overcome. The challenges of bandwidth availability to the end subscriber are just starting to be overcome. The penetration of devices that can actually decode and support” 4K is also just starting to be overcome. He added: “We’re just starting to hit that inflection point of all three of those things making it possible that you can start to go. Now, you’ve got to find the business case” for streaming more 4K.

Although “all the studio content is generated in 4K,” he pointed out that 4K content from cable networks is “very, very limited,” when available at all at this point.

He added: “We see a lot of customers continuing to test and beta launch [4K] through 2017,” with “limited release” plans. “We’ve had a number of distributors that have been testing 4K without” High Dynamic Range (HDR) and are not seeing enough of a benefit,” so “they have delayed launching” until they can offer HDR also, he said, predicting 4K and HDR will be launched together by an increased number of Deluxe customers in 2018.

The new ATSC 3.0 standard provides a wide range of benefits and opportunities for broadcasters, as well as many of the companies that provide content and services to them, enabling over-the-air delivery of everything from immersive audio to 4K video to targeted advertising.

Of ATSC 3.0’s arrival, Morrison told us: “In the sense that maybe it makes it easier to distribute higher bandwidth out to homes, maybe it opens up more opportunity for the creation of higher quality 4K content.” That content eventually “comes down to groups like ours to deliver in a VOD environment,” he noted. But he added it was too soon to gauge what the full impact will be from ATSC 3.0.