The global next generation video codec market is expected to reach an estimated $9.7 billion by 2031 with a CAGR of 22.1% from 2025 to 2031. The major drivers for this market are the growing demand for better video experience, increasing mobile video consumption, and the proliferation of video content across platforms.
The future of the global next generation video codec market looks promising with opportunities in the mobile phone, computer, and TV markets.
Q.2. Which segments will grow at a faster pace and why?
Q.3. Which region will grow at a faster pace and why?
Q.4. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.5. What are the business risks and competitive threats in this market?
Q.6. What are the emerging trends in this market and the reasons behind them?
Q.7. What are some of the changing demands of customers in the market?
Q.8. What are the new developments in the market? Which companies are leading these developments?
Q.9. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.10. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.11. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
The future of the global next generation video codec market looks promising with opportunities in the mobile phone, computer, and TV markets.
- Within the video codecs type category, the HEVC segment will remain the largest segment over the forecast period due to cutting the necessary bitrate in half while maintaining similar image quality, but at the cost of more processing complexity.
- Within the application category, mobile phone is expected to witness the highest growth.
- In terms of region, APAC is expected to witness the highest growth over the forecast period due to the presence of a manufacturing hub for consumer electronics in this region.
Emerging Trends in the Next Generation Video Codec Market
Emerging trends in the next-generation video codec market reflect advancements in compression technology, enhanced video quality, and the increasing demand for efficient streaming. These trends are shaping the future of digital video and multimedia experiences.- Adoption of AV1 Codec: The AV1 codec is gaining traction for its superior compression efficiency and open-source nature. It reduces data usage while maintaining high video quality, making it ideal for streaming services and online platforms.
- Integration with 5G Technology: Next-gen video codecs are being optimized for 5G networks to enhance streaming quality and reduce latency. This integration supports high-definition and immersive video experiences over mobile networks.
- Enhanced Support for HDR and 8K Content: New codecs are designed to support High Dynamic Range (HDR) and 8K video content, improving visual quality and meeting the growing demand for high-resolution media.
- Increased Focus on Real-Time Applications: There is a growing emphasis on codecs that support real-time video applications, such as video conferencing and live streaming, ensuring low latency and high quality.
- Compression for Cloud Gaming: Next-gen video codecs are being adapted for cloud gaming, where efficient video compression is crucial for delivering high-quality gaming experiences over streaming platforms.
Recent Developments in the Next Generation Video Codec Market
Key developments in the next-generation video codec market are driving innovation and adoption across various sectors. These advancements are crucial for improving video quality, compression efficiency, and user experience.- Launch of AV1 Codec: The AV1 codec has been officially launched and is gaining widespread adoption due to its efficiency and open-source nature. It offers improved compression over previous codecs, making it ideal for streaming services.
- Development of VVC Codec: The VVC codec, designed for high-definition and 8K video, has been developed and is being tested for commercial use. It provides superior compression and quality, addressing the demands of high-resolution content.
- Advancements in HEVC Licensing: HEVC licensing models have been updated to address cost and compatibility issues. This development aims to promote broader adoption of HEVC for streaming and broadcasting applications.
- Implementation of Codecs in 5G Networks: Next-gen codecs are being integrated with 5G networks to enhance streaming efficiency and support high-definition video. This integration is crucial for enabling advanced mobile video applications.
- Growth in Cloud Gaming: Video codecs are being optimized for cloud gaming to deliver high-quality, low-latency gaming experiences. This development supports the growth of cloud-based gaming platforms and services.
Strategic Growth Opportunities for Next Generation Video Codec Market
The next-generation video codec market presents strategic growth opportunities across various applications. These opportunities highlight the potential for innovation and expansion in video technology and digital media.- Streaming Services: There is a significant opportunity to enhance streaming services by adopting next-gen video codecs, which offer better compression and quality. This can improve user experience and reduce bandwidth costs.
- Broadcasting: Implementing advanced video codecs in broadcasting can enhance picture quality and support higher resolutions like 4K and 8K. This growth opportunity is crucial for upgrading broadcasting standards and infrastructure.
- Video Conferencing: Next-gen codecs can improve video quality and reduce latency in video conferencing applications. This opportunity is particularly relevant for remote work and virtual collaboration tools.
- Cloud Gaming: Optimizing video codecs for cloud gaming can enhance the quality and performance of gaming experiences delivered over streaming platforms. This growth opportunity supports the expansion of cloud-based gaming services.
- Augmented and Virtual Reality: Advanced video codecs can support high-quality video streaming for augmented and virtual reality applications, enhancing immersive experiences. This opportunity is important for the growth of AR and VR technologies.
Next Generation Video Codec Market Drivers and Challenges
The next-generation video codec market is influenced by several drivers and challenges related to technology, economics, and regulation. Understanding these factors is essential for navigating the market and achieving growth.The factors responsible for driving the next-generation video codec market include:
- Technological Advancements: Continuous improvements in codec technology drive market growth by enhancing compression efficiency and video quality, meeting the demand for high-resolution and high-definition content.
- Increasing Demand for Streaming: The growing popularity of streaming services drives the adoption of advanced codecs to improve user experience and reduce bandwidth costs, supporting market expansion.
- Support for High-Resolution Content: The need for codecs that support 4K, 8K, and HDR content drives innovation and development in video codecs, catering to the increasing demand for high-quality media.
- Integration with 5G Networks: The rollout of 5G networks creates a demand for codecs optimized for high-speed, low-latency video streaming, driving advancements and adoption in the market.
- Growth in Cloud-Based Services: The rise of cloud-based video services and cloud gaming drives the need for efficient video codecs to deliver high-quality content and gaming experiences over streaming platforms.
Challenges in the next-generation video codec market are:
- High Development Costs: The development of advanced video codecs involves significant costs, which can be a barrier to innovation and widespread adoption in the market.
- Licensing and Patent Issues: Complex licensing models and patent disputes can hinder the adoption of new codecs and impact the cost and availability of codec technology.
- Compatibility and Integration: Ensuring compatibility and seamless integration of new codecs with existing infrastructure and platforms can be challenging, affecting deployment and adoption rates.
- Regulatory Hurdles: Navigating regulatory requirements and standards for video codecs can be complex, impacting the development and implementation of new technologies.
- Market Fragmentation: The presence of multiple competing codecs and standards can lead to market fragmentation, creating challenges for standardization and widespread adoption.
List of Next Generation Video Codec Companies
Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies next generation video codec companies cater increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base.Some of the next generation video codec companies profiled in this report include:
- Hikvision
- VITEC
- Harmonic
- Motorola Solutions
- CommScope
- Axis Communications
- Dahua Technology
- HaiVision
- Netflix
- Amazon Prime
Next Generation Video Codec by Segment
The study includes a forecast for the global next generation video codec market by video codecs type, application, and region.Video Codecs Type [Analysis by Value from 2019 to 2031]:
- AVC
- AV1
- HEVC
- VP9
- VVC
Application [Analysis by Value from 2019 to 2031]:
- Mobile Phone
- Computer
- TV
- Others
Region [Analysis by Value from 2019 to 2031]:
- North America
- Europe
- Asia Pacific
- The Rest of the World
Country-Wise Outlook for the Next Generation Video Codec Market
Major players in the market are expanding their operations and forming strategic partnerships to strengthen their positions. Below highlights recent developments by major next-generation video codec producers in key regions: the USA, China, India, Japan, and Germany.- United States: Significant progress has been made in developing and adopting advanced video codecs like AV1 and VVC (Versatile Video Coding). Major tech companies and streaming services are integrating these codecs to enhance streaming quality and reduce bandwidth usage.
- China: China is actively developing proprietary video codecs and investing in research to enhance compression efficiency. Chinese companies are also working on integrating next-gen codecs into broadcasting and mobile platforms, aiming to improve video delivery and user experience.
- Germany: Germany is focusing on the implementation of HEVC (High Efficiency Video Coding) and exploring the potential of newer codecs like VVC. German tech firms are involved in standardization efforts and optimizing codecs for various applications, including broadcasting and video conferencing.
- India: India is making strides in adopting and deploying advanced video codecs for mobile and online video content. The focus is on improving video quality and streaming efficiency, particularly for mobile networks and internet services in underserved regions.
- Japan: Japan is leveraging its strong technology sector to advance video codec technologies. Japanese companies are involved in developing and commercializing next-gen codecs such as AV1, with applications in broadcasting, streaming, and immersive media experiences.
Features of the Global Next Generation Video Codec Market
- Market Size Estimates: Next generation video codec market size estimation in terms of value ($B).
- Trend and Forecast Analysis: Market trends (2019 to 2024) and forecast (2025 to 2031) by various segments and regions.
- Segmentation Analysis: Next generation video codec market size by video codecs type, application, and region in terms of value ($B).
- Regional Analysis: Next generation video codec market breakdown by North America, Europe, Asia Pacific, and Rest of the World.
- Growth Opportunities: Analysis of growth opportunities in different video codecs type, application, and regions for the next generation video codec market.
- Strategic Analysis: This includes M&A, new product development, and competitive landscape of the next generation video codec market.
- Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
This report answers the following 11 key questions:
Q.1. What are some of the most promising, high-growth opportunities for the next generation video codec market by video codecs type (AVC, AV1,HEVC, VP9, and VVC), application (mobile phone, computer, TV, and others), and region (North America, Europe, Asia Pacific, and the Rest of the World)?Q.2. Which segments will grow at a faster pace and why?
Q.3. Which region will grow at a faster pace and why?
Q.4. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.5. What are the business risks and competitive threats in this market?
Q.6. What are the emerging trends in this market and the reasons behind them?
Q.7. What are some of the changing demands of customers in the market?
Q.8. What are the new developments in the market? Which companies are leading these developments?
Q.9. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.10. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.11. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
Table of Contents
1. Executive Summary
2. Global Next Generation Video Codec Market: Market Dynamics
3. Market Trends and Forecast Analysis from 2019 to 2031
4. Market Trends and Forecast Analysis by Region from 2019 to 2031
5. Competitor Analysis
6. Growth Opportunities and Strategic Analysis
7. Company Profiles of Leading Players
Companies Mentioned
- Hikvision
- VITEC
- Harmonic
- Motorola Solutions
- CommScope
- Axis Communications
- Dahua Technology
- HaiVision
- Netflix
- Amazon Prime
Methodology
The analyst has been in the business of market research and management consulting since 2000 and has published over 600 market intelligence reports in various markets/applications and served over 1,000 clients worldwide. Each study is a culmination of four months of full-time effort performed by the analyst team. The analysts used the following sources for the creation and completion of this valuable report:
- In-depth interviews of the major players in the market
- Detailed secondary research from competitors’ financial statements and published data
- Extensive searches of published works, market, and database information pertaining to industry news, company press releases, and customer intentions
- A compilation of the experiences, judgments, and insights of professionals, who have analyzed and tracked the market over the years.
Extensive research and interviews are conducted in the supply chain of the market to estimate market share, market size, trends, drivers, challenges and forecasts.
Thus, the analyst compiles vast amounts of data from numerous sources, validates the integrity of that data, and performs a comprehensive analysis. The analyst then organizes the data, its findings, and insights into a concise report designed to support the strategic decision-making process.
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