 The television industry has been holding its breath. After the failure of 3D, TV manufacturers have turned to 4K as the best option to get customers to upgrade. The problem has been there isn't really anything to watch, and no 4K content means no 4K sales. This year at CES, that's all changed. One company has emerged as the potential savior that has the brand awareness and the infrastructure to make 4K happen in the home. Netflix. CEO Reed Hastings has been everywhere as Sony, Samsung, LG and Vizio all announced that they will be including Netflix Ultra HD 4K streaming in their televisions. We really wanted to continue to push the envelope in terms of delivering the highest quality picture possible. So in the last few years we've moved to deliver high definition HD. We recently started doing super high def, which is a high bit rate, high definition still 1080p. And the next logical step was to embrace the 4K sets that TV manufacturers are building. And several interesting sets coming out this year. And so we've developed a lot of the technology to encode and deliver 4K content to those TV sets. That will be a big piece of our effort this year. One of the interesting pieces of course is that 4K is not going to have a major lifetime on a plastic disc. It doesn't fit on a Blu-Ray disc. And I think it's unlikely that people will want to upgrade their DVD players. Similarly, it's unlikely that it will be embraced rapidly on the broadcast and cable side. And so internet delivery is where it's at. The company's original programming is allowing it to move forward without waiting on studios for 4K masters. The second season of House of Cards will be the first show to stream in 4K in the second quarter of this year. Sony is also lending a hand. And the entire run of Breaking Bad will stream later on in 2014. That said, they're not home free just yet. Bandwidth is going to be a likely concern. And Amazon has announced its own set of 4K partnerships. Comcast, DirecTV, and Emgo have their own plans as well. But despite the industry shift, some are worried that 4K alone won't be enough. I actually believe that the color and the high dynamic range is a bigger impact than just straight resolution. So I think resolution is great. I mean, we're a big fan of ultra high def, so obviously we're going to put it on a lot of products. And if you get close to a small TV or at a large TV like this, we're standing in front of 120 inch, the resolution is very, very important. But from a customer impact and feeling like you're actually in the scene, the color, the high dynamic range, and that contrast that we've got, I think is actually more important to make them feel like they're there. One of the technologies that makes that possible is the new Dolby Vision format, which remasters films and television for a greater dynamic range and more accurate color than we've ever seen before on TVs. Dolby announced four streaming partners for that format during the week, and Netflix was on board. So typically so far what others have done is they use the standard signal that is being distributed today on Blu-ray broadcasts, over the top streaming. And when I say standard, I mean standard dynamic range, 8 bits per pixel. That's been the standard for the last 20 years. Unfortunately, that's outdated. We believe you have to go higher in terms of bit depth. So we go with Dolby Vision to 12 bit and up. And with that, you can retain a lot more dynamic range, detail in dark areas, detail in bright areas. So bright areas don't get washed out as easily. Dark detail gets retained and doesn't drown in the black. And at the same time, you can retain a much higher color gamut, which means more colors, more vibrant colors, a lot more true to life viewing experience that consumers can instantly recognize as an improvement to what they're seeing today. It's another example of Netflix looking ahead and leveraging every technological advantage at its disposal. Everybody's going to have 4K eventually. It's just a matter of time. But for right now, Netflix is leading that charge. The company has gone from red envelopes to changing the way we think about television. We're entering a new era, one of easier access, better images, and people can watch what they want when they want it. And it's all happening online.
 The television industry has been holding its breath. After the failure of 3D, TV manufacturers
 have turned to 4K as the best option to get customers to upgrade. The problem has been
 there isn't really anything to watch, and no 4K content means no 4K sales.
 This year at CES, that's all changed. One company has emerged as the potential savior
 that has the brand awareness and the infrastructure to make 4K happen in the home. Netflix. CEO
 Reed Hastings has been everywhere as Sony, Samsung, LG and Vizio all announced that they
 will be including Netflix Ultra HD 4K streaming in their televisions.
 We really wanted to continue to push the envelope in terms of delivering the highest quality
 picture possible. So in the last few years we've moved to deliver high definition HD.
 We recently started doing super high def, which is a high bit rate, high definition
 still 1080p. And the next logical step was to embrace the 4K sets that TV manufacturers
 are building. And several interesting sets coming out this year. And so we've developed
 a lot of the technology to encode and deliver 4K content to those TV sets. That will be
 a big piece of our effort this year. One of the interesting pieces of course is that 4K
 is not going to have a major lifetime on a plastic disc. It doesn't fit on a Blu-Ray disc.
 And I think it's unlikely that people will want to upgrade their DVD players. Similarly,
 it's unlikely that it will be embraced rapidly on the broadcast and cable side. And so internet
 delivery is where it's at. The company's original programming is allowing it to move forward
 without waiting on studios for 4K masters. The second season of House of Cards will be
 the first show to stream in 4K in the second quarter of this year. Sony is also lending
 a hand. And the entire run of Breaking Bad will stream later on in 2014. That said, they're
 not home free just yet. Bandwidth is going to be a likely concern. And Amazon has announced
 its own set of 4K partnerships. Comcast, DirecTV, and Emgo have their own plans as well. But
 despite the industry shift, some are worried that 4K alone won't be enough. I actually
 believe that the color and the high dynamic range is a bigger impact than just straight
 resolution. So I think resolution is great. I mean, we're a big fan of ultra high def,
 so obviously we're going to put it on a lot of products. And if you get close to a small
 TV or at a large TV like this, we're standing in front of 120 inch, the resolution is very,
 very important. But from a customer impact and feeling like you're actually in the scene,
 the color, the high dynamic range, and that contrast that we've got, I think is actually
 more important to make them feel like they're there. One of the technologies that makes
 that possible is the new Dolby Vision format, which remasters films and television for a
 greater dynamic range and more accurate color than we've ever seen before on TVs. Dolby
 announced four streaming partners for that format during the week, and Netflix was on
 board. So typically so far what others have done is they use the standard signal that
 is being distributed today on Blu-ray broadcasts, over the top streaming. And when I say standard,
 I mean standard dynamic range, 8 bits per pixel. That's been the standard for the last
 20 years. Unfortunately, that's outdated. We believe you have to go higher in terms
 of bit depth. So we go with Dolby Vision to 12 bit and up. And with that, you can retain
 a lot more dynamic range, detail in dark areas, detail in bright areas. So bright areas don't
 get washed out as easily. Dark detail gets retained and doesn't drown in the black. And
 at the same time, you can retain a much higher color gamut, which means more colors, more
 vibrant colors, a lot more true to life viewing experience that consumers can instantly recognize
 as an improvement to what they're seeing today. It's another example of Netflix looking ahead
 and leveraging every technological advantage at its disposal. Everybody's going to have
 4K eventually. It's just a matter of time. But for right now, Netflix is leading that
 charge. The company has gone from red envelopes to changing the way we think about television.
 We're entering a new era, one of easier access, better images, and people can watch what they
 want when they want it. And it's all happening online.