Elemental Technologies sees a vivid future in ultra high definition TV

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Ultra high definition TVs, running on a standard called 4K, attracted crowds at the Consumer Electronics show this past week. Portland-based Elemental Technologies hopes to capitalize on the appetite for the new format.

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LAS VEGAS – The crowds at the annual Consumer Electronics Show this past week clustered around the biggest and brightest TVs on the show floor, glistening screens that display enormous images using a new, ultra-high definition technology called 4K.

What is 4K?

The picture

: Most top-end HDTVs can show video in a standard called 1080p. The new ultra high definition TV standard, called 4K, has 8.2 million pixels (a pixel is the smallest dot of light on the screen) -- four times as many as 1080p. 4K refers to the 4,000 pixels displayed horizontally by the new video standard.

Limitations

: On modestly sized screens, at normal viewing distances (5 to 10 feet), the human eye can’t appreciate the higher resolution 4K delivers. It becomes apparent if you’re closer to the screen or watching a larger set (perhaps 80 inches or above).

Pricing

: Huge 4K TVs, such as a 110-inch Samsung model, cost more than $100,000. Screens around 50 inches, though, have fallen under $1,000. Supporters of 4K expect prices on extra-large screens will also drop precipitously in the next few years.

Programs

: Comcast, DirecTV and others were showing off 4K programming this week. Netflix announced at CES that

. Amazon announced that it plans to stream 4K movies from its instant video service.

The images are so big, and so vivid, you’d be forgiven for thinking you’re gazing out at a cityscape through a window rather than at the TV. A cluster of screens display a college football game on a sunny fall afternoon that feels as crisp as it would watching from the press box.

This is what electronics manufacturers hope the future of TV looks like. And it’s what a Portland startup called Elemental Technologies is counting on.

The new 4K screens present images with four times as many pixels as the high-definition TVs that have become ubiquitous in American homes. Those sharper images enable huge TVs that could fill a wall without sacrificing picture quality, potentially turning every living room into a window to the world.

The technology for the new 4K screens is well established, but broadcasters and manufacturers are still working out how to bring those images to your home.

The ultra-HD images contain so much information that existing broadcast and streaming technologies would be overwhelmed. So Elemental, among others, has developed video encoding technology that compresses 4K video to a manageable size – something that broadcasters can handle, and many existing home Internet connections can stream.

On the sidelines of CES this week, away from the floodlights, press conferences and hordes of gadget-seekers, Elemental was working quietly to build support for its software, to place it inside the electronic hardware that would lead the path to 4K.

Elemental expects 4K will take off, whether it’s this year or next. It’s a wide-open field, ripe for a new player with big ambitions.

“Elemental has been a small company. We’re at the point where we need to scale to something more well-known in our industry,” said Sam Blackman, Elemental’s co-founder and chief executive.

Already among Oregon’s fastest-growing technology companies, Elemental’s revenues doubled in 2012 to $21 million and climbed more than 50 percent last year. (Final numbers aren’t in yet.)

The company has outgrown its downtown offices, and plans to add offices in an adjacent building; others are scattered in 10 offices around the globe, including five in Asia. Clients include many of the big names in video and TV, including the BBC, Comcast, ESPN and HBO.

Elemental capitalized on the proliferation of mobile devices and home electronics that stream video – everything from the iPad to the Roku to the new game consoles from Sony and Microsoft. Elemental’s tools enable broadcasters to stream online video that plays seamlessly across those disparate devices.

If you’re watching TV over the Internet from one of the top media companies – and a growing number of people are – there’s a good chance Elemental’s technology encoded it. Broadcasters rely on Elemental to give streaming viewers the same experience people have watching their TV at home.

“The art of encoding is to trick the eye into thinking it’s seeing what was originally captured by the camera,” said Elemental marketing chief Keith Wymbs.

For at least another year, Elemental expects this proliferation of screens will continue to drive its growth. At CES, though, Elemental was focused on the bigger picture. And that’s 4K.

While crowds gathered on the show floor and tech bloggers packed press conferences and corporate parties, Blackman spent the week huddled in a dimly lit suite inside the Venetian Las Vegas hotel, hosting a parade of video engineers from an array of broadcasters and equipment companies. A reel of Portland Timbers highlights looped on an 84-inch TV – footage Elemental shot itself last fall, because there’s very little 4K programming publicly available.

While broadcasters and cable companies have shown interest in 4K, the technology is coming of age in the Internet era – meaning viewers don’t have to wait for their cable operators to start offering ultra high-definition programming (and perhaps charge a premium for the privilege of watching 4K). They can stream it instead.

All that plays neatly to Elemental’s strengths in online video.

While Blackman was meeting with engineering executives from top media companies at the Venetian, Wymbs, the marketing chief, was patrolling the show floor. Standing in industry booths and walking the hallways outside, he struck deals with 4k camera-makers and video hardware companies to use Elemental’s encoding technology in their prototypes.

Even a small booth at CES can cost a company $100,000. A big splash costs $1 million or more. So Elemental worked to put its technology on display in other companies’ showcase technologies.

“That’s how we can raise our level of awareness,” Wymbs said, “by being a good partner.”

Qualcomm product manager Leon Farasati, left, talks tech with Elemental Technologies marketing vice president Keith Wymbs on the show floor at the Consumer Electronics Show last week. Qualcomm was streaming ultra high definition video from a tablet to a TV, using the company's Snapdragon processor and Elemental's video encoding technology.

On the CES floor, chipmaker Qualcomm has a 4K TV streaming video wirelessly from a tablet in its booth, using Elemental’s encoding technology to shrink the bitrate down to 10 megabits per second – on par with standard home Internet connections.

Underlying 4K is a new video encoding standard called H.265, or HEVC. Encoding the video for broadcast or streaming requires 10 times the computational power of conventional HD programming. Fortunately,

Elemental competes with established communications companies including Cisco and Ericsson, whose specialized chips provide the computing muscle needed to pull that off.

But Elemental took a different approach: It harnesses standard microprocessors from Intel and graphics processors from Nvidia, applying Elemental’s software to make the conversion. Software, Elemental maintains, gives it more flexibility than hardware to adapt to evolving video standards – and the ability to move quickly is key in new products.

“If you invest in a software-based approach,” Blackman said, “it doesn’t matter what comes down the pike.”

Elemental Technologies

Founded

: 2006, by a team led by CEO Sam Blackman, formerly circuit designer at onetime Oregon video chip company Pixelworks.

Products

: Software for converting video for broadcast online. Customers include the BBC, Comcast, ESPN, HBO and Warner Bros. Elemental’s software runs on standard Intel microprocessors and graphics chips from Nvidia.

Employees

: 142, including 101 at its downtown Portland headquarters.

Backing

: Almost $30 million in outside investment, including a $13 million round in 2012 led by Norwest Venture Partners. Prior backers include General Catalyst, Voyager Capital, Steamboat Ventures and the Oregon Angel Fund.

Revenues

: Elemental hasn’t reported 2013 results yet, but says revenues were up more than 50 percent from the $21 million it reported in 2012.

Every approach comes with tradeoffs, said Michelle Abraham, a senior analyst tracking video technology for SNL Kagan. It’s more adaptable, but it lacks the horsepower of high-octane, specially designed chips.

“There’s benefits to the hardware solution,” she said. “You lose some flexibility but you gain some density, so you can support more streams.”

Still, Abraham said Elemental’s pursuit of 4K makes sense. Any new technology opens the door to new competitors, and she said Elemental’s experience working with big clients on their video streaming gives the Portland company an opening if it develops 4K streaming technology for broadcasters, too – a step Elemental is preparing for as it anticipates the convergence of broadcast and streaming technologies.

“They’ve positioned themselves well,” Abraham said. “They have a long list of customers and they’ve been able to gain a lot of experiences serving those customers that I think will serve them sell.”

To skeptics, though, 4K sounds a lot like 3D.

A few years ago the TV industry and broadcasters were hyping the possibility of bringing 3D movies to home TVs. A handful of broadcasters invested heavily in the format, but it never caught on with viewers. ESPN, for example, shut down its 3D channel last year.

There’s a fair amount of ambivalence about 3D in movie theaters, where film critics complain it doesn’t add much to the experience. At home, where screens are smaller and viewing angles constrained, viewers couldn’t be coaxed into putting on glasses to watch a movie.

Doubters abound for 4K, too. At normal viewing distances, the human eye isn’t capable of distinguishing the improved 4K picture from current HD images except on very large screens. It’s apparent if you walk right up to a screen at CES, but imperceptible from across a room.

Tech research firm IHS forecasts a spike in ultra high-def TV sales this year, jumping to 10 million from just 1.5 million in 2013. But overall, the firm projects it will remain a niche technology for years to come. By 2018, IHS predicts ultra HD sales will number 38.5 million – just 16 percent of all LCD TV sales.

Count Abraham among the optimists. To her, 4K is an attractive proposition. The picture is certainly sharper, to her eyes, and it provides a marketing opportunity for TV manufacturers who feature the technology and to broadcasters who offer sports, shows and movies in greater detail.

“I think the TVs will sell,” she said, in part because it’s so easy to describe what 4K represents. “It’s a higher number. Those sorts of things are pretty easy for consumers to pick up on.”

Back at his suite in the Venetian, Blackman said he’s convinced of 4K’s appeal. But he acknowledges some uncertainty about when it will catch on. Elemental works the tech conferences and trade shows to put its markers in place, positioning itself to cash in when the new standard takes off.

Just maybe, he allows with a hopeful grin, it’ll catch on this year.

“That would be a large accelerator,” Blackman said. “If that grows fast, we’ll be golden.”

-- Mike Rogoway; twitter: @rogoway; 503-294-7699

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