Technology Landscape, Trends and Opportunities in Next Generation Video Codec Market

The technologies in the next generation video codec market have undergone significant changes in recent years, with a shift from AVC (Advanced Video Coding) to HEVC (High Efficiency Video Coding), and further to AV1 and VVC (Versatile Video Coding). The transition to HEVC offered improvements in video quality and compression efficiency, allowing for better streaming experiences. The emergence of AV1, an open-source codec, has become a major alternative to HEVC, providing enhanced compression efficiency and broader industry support. More recently, VVC has been developed to offer even greater compression rates and improved video quality, addressing the needs of high-definition and 8K content. These advancements reflect a significant evolution in video codec technologies, with a clear focus on improving video quality, reducing bandwidth consumption, and enabling better performance across devices such as mobile phones, computers, and TVs.

Emerging Trends in the Next Generation Video Codec Market

The next generation video codec market is evolving rapidly as demand for higher video quality, improved compression efficiency, and optimized streaming performance increases. Emerging trends in the industry are driven by advances in technology, rising data consumption, and the proliferation of high-definition video content. These trends are reshaping how video is encoded, transmitted, and consumed across various platforms and devices. Below are five key trends influencing this market:

• Shift to Open-Source Codecs (AV1): The adoption of AV1, an open-source video codec, is gaining momentum. AV1 offers better compression rates than previous codecs like HEVC, while eliminating licensing fees. This shift is especially attractive for streaming services and content providers, as it enables cost savings and wider compatibility across platforms.
• Increase in 8K and High-Definition Video Content: With the growing popularity of 8K TVs and high-definition streaming services, there is a rising demand for more efficient codecs capable of handling larger video files. VVC (Versatile Video Coding) has emerged as a leading solution for encoding 8K and ultra-high-definition content, providing better compression and higher quality for next-gen video experiences.
• AI-Powered Video Encoding: The integration of Artificial Intelligence (AI) in video encoding and compression is another emerging trend. AI-based technologies are improving the optimization of video quality, reducing latency, and enhancing real-time streaming. AI-driven algorithms allow for adaptive bitrate streaming, ensuring smoother video playback on varying network conditions.
• Support for Immersive Content (360° and VR): With the increasing popularity of immersive content, such as 360° videos and virtual reality (VR), the demand for codecs optimized for these formats is growing. Next-gen video codecs are being developed to handle large volumes of data generated by immersive content while maintaining high-quality visuals and efficient compression.
• Integration with 5G Technology: As 5G networks expand, the need for video codecs that can efficiently stream high-resolution video content over fast and reliable connections grows. The integration of next-gen codecs like AV1 and HEVC with 5G technology is enabling ultra-low latency video streaming, enhancing the overall user experience for mobile and wireless video consumers.

These emerging trends are driving the next generation video codec market towards more efficient, cost-effective, and high-quality solutions. The shift to open-source codecs, advancements in 8K content encoding, AI integration, support for immersive content, and the integration with 5G networks are reshaping the video streaming landscape. These developments are not only improving video quality and performance but also pushing the boundaries of how video content is delivered across different devices and platforms.

Next Generation Video Codec Market : Industry Potential, Technological Development, and Compliance Considerations

Potential in Technology:

The technology potential in the next generation video codec market is vast, as advancements in video compression algorithms enable more efficient delivery of high-quality content. Next-gen codecs like AV1, VVC, and HEVC are designed to handle the increasing demand for high-definition, 4K, 8K, and immersive video formats while reducing bandwidth requirements. AV1, in particular, has emerged as a highly promising open-source codec, offering superior compression efficiency compared to its predecessors, such as HEVC. It has the potential to revolutionize streaming services by reducing data consumption without sacrificing video quality, making it highly suitable for mobile networks and large-scale content delivery.

Degree of Disruption:

The degree of disruption in this market is high, as newer codecs are expected to replace older technologies like AVC and VP9 due to their superior performance. With major streaming platforms and content distributors adopting these advanced codecs, traditional methods of video compression are being phased out.

• Regulatory Compliances

Regarding technology maturity, HEVC is widely deployed, while AV1 and VVC are still in the adoption phase. Regulatory compliance is a crucial factor, particularly in the case of patent and licensing issues with HEVC. AV1’s open-source nature helps alleviate concerns over licensing fees and patents, encouraging faster adoption across industries.

Recent Technological development in Next Generation Video Codec Market by Key Players

The next generation video codec market is evolving rapidly as the demand for high-quality video content continues to grow across industries such as security, broadcasting, and entertainment. Key players in the market are focusing on advancements in video compression technologies to optimize bandwidth, improve streaming efficiency, and enhance video quality, particularly with the rise of 4K, 8K, and immersive video formats. Below are recent developments from key players shaping the future of video codec technologies.

• Hikvision: Hikvision, a leader in video surveillance systems, has integrated advanced video codecs such as H.265 and AV1 into its product offerings. This integration enhances video streaming efficiency, allowing for higher resolution video streams with lower bandwidth consumption, making it ideal for large-scale surveillance deployments.
• VITEC: VITEC has been at the forefront of HEVC and AV1 adoption, offering professional video encoding and streaming solutions. The company’s focus on supporting these next-gen codecs enables broadcasters and enterprise users to deliver high-quality video content with reduced latency and bandwidth, further improving media streaming quality.
• Harmonic: Harmonic has enhanced its video encoding solutions by integrating HEVC and AV1 codecs into its cloud-based media processing platform. These improvements have allowed for more efficient streaming of high-definition and 4K content, with a focus on reducing operational costs for broadcasters and content providers.
• Motorola Solutions: Motorola Solutions has recently adopted HEVC for its video surveillance products, providing better compression and improved video quality for security professionals. This transition enables users to transmit higher-resolution video over networks with reduced bandwidth consumption, making it particularly valuable for mobile surveillance in challenging environments.
• CommScope: CommScope has embraced next-gen video codecs such as AV1 to improve bandwidth efficiency in its broadcast and cable systems. By adopting these new codecs, CommScope has enhanced its content delivery solutions, enabling faster, more efficient distribution of high-quality video content to users.
• Axis Communications: Axis Communications has integrated advanced codecs like H.265 and HEVC into its security cameras and video management software. These codecs help to optimize video streaming while maintaining high quality, allowing businesses to maximize their surveillance capabilities while minimizing storage and network requirements.
• Dahua Technology: Dahua Technology has upgraded its video surveillance systems with next-gen codecs like H.265 and AV1, which provide higher video quality and greater bandwidth efficiency. These upgrades help Dahua’s customers in the security and surveillance sectors to lower data storage and transmission costs while maintaining superior video clarity.

These developments reflect the growing importance of adopting next-generation video codecs to improve video delivery, reduce bandwidth requirements, and enhance the overall quality of video content across multiple industries. The integration of advanced technologies by key players like Hikvision, VITEC, Harmonic, and others is driving a shift towards more efficient, high-quality video experiences, especially for streaming, surveillance, and broadcasting applications.

Next Generation Video Codec Market Driver and Challenges

The next generation video codec market is growing rapidly, driven by the need for high-quality video content across industries like entertainment, broadcasting, and surveillance. As video compression technologies advance, companies aim to improve video quality, reduce bandwidth consumption, and enhance streaming and storage. However, the market faces several challenges affecting codec adoption. Below are the key drivers and challenges impacting the market.

Major Drivers Impacting the next generation video codec market:

• Demand for High-Quality Video Content: The demand for UHD content like 4K and 8K is increasing, with codecs such as HEVC and AV1 delivering high-quality video with reduced bandwidth requirements, enhancing user experiences.
• Bandwidth and Storage Optimization: Next-gen codecs reduce bandwidth consumption and storage costs by offering better compression ratios, enabling efficient video delivery for streaming services and connected devices.
• Adoption of Cloud-Based Streaming: Cloud platforms require advanced codecs for efficient video encoding. Next-gen codecs support high-quality video streams while minimizing operational costs for cloud providers.
• Rising Mobile Video Consumption: Increased mobile video streaming demands codecs like AV1 and HEVC that reduce data consumption while delivering high-quality content.
• Industry Shift to 5G: The rollout of 5G networks increases the need for video codecs that handle high resolutions and faster data speeds, enhancing seamless video experiences.

Major Challenges Impacting the next generation video codec market:

• High Implementation Costs: The adoption of next-gen codecs requires significant investments in technology and infrastructure, creating barriers for smaller companies.
• Compatibility and Integration Issues: Integrating new codecs with legacy systems can be complex, delaying adoption.
• Licensing and Patent Disputes: Licensing fees and patent disputes related to codecs can increase costs and create uncertainty for businesses.
• Processing Power Requirements: Advanced codecs like AV1 demand higher processing power, which can be a challenge for devices with limited resources, such as mobile phones.
• Regulatory and Legal Compliance: Video codecs must comply with evolving global regulations, posing challenges for developers and service providers.

The growth of the next generation video codec market is fueled by the demand for high-quality video, the need for bandwidth and storage optimization, and the adoption of cloud and 5G technologies. While challenges like high costs, licensing issues, and processing requirements exist, these trends drive the widespread adoption of advanced codecs like HEVC and AV1, reshaping how content is delivered across industries.

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. With 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 includes.

• Hikvision
• VITEC
• Harmonic
• Motorola Solutions
• CommScope
• Axis Communications

Next Generation Video Codec Market by Technology

• Technology Readiness by Technology Type for Next Generation Video Codec Market: The technology readiness of AVC, HEVC, VP9, AV1, and VVC varies significantly in the next generation video codec market. AVC is highly mature and widely used across all video applications. HEVC has reached a high level of maturity and is used in high-definition video streaming, with significant market penetration. VP9 is commonly used for streaming services like YouTube, providing efficient compression. AV1 is in the process of wider adoption, with major players backing it due to its open-source and royalty-free model. VVC, though technically advanced and promising for 8K and immersive video, is still in the early stages of adoption, with limited implementations. Competitive levels are high for AVC, HEVC, and VP9, while AV1 and VVC are emerging but gaining ground. Regulatory compliance remains a challenge for HEVC, while AV1 and VVC are working towards addressing these issues with royalty-free models and better efficiency. Key applications for these technologies span streaming, broadcasting, mobile, and 5G-based video delivery.
• Competitive Intensity and Regulatory Compliance of Different Technologies for Next Generation Video Codec Market: The competitive intensity in the next generation video codec market is high, with different codecs competing for dominance across various sectors. HEVC remains dominant in premium video streaming services, but AV1 is gaining traction due to its open-source, royalty-free nature, making it a strong competitor. VP9 is widely adopted by platforms like YouTube for efficient video streaming. VVC’s potential lies in its ability to handle 8K content and immersive video, making it the next big contender. Regulatory compliance is a critical factor, with increasing demands for energy-efficient encoding solutions and reducing intellectual property conflicts, especially with HEVC's complex licensing structure. As these technologies evolve, they must adapt to global regulations, including bandwidth and environmental efficiency.
• Disruption Potential of Different Technologies for Next Generation Video Codec Market: AVC, AV1, HEVC, VP9, and VVC each have distinct disruption potentials in the next generation video codec market. AVC (H.264) remains widely used, but newer codecs like HEVC and VP9 are displacing it with better compression efficiency and video quality, particularly for streaming and high-resolution video. AV1 offers superior compression and is optimized for web and mobile streaming, further disrupting the market by being open-source and royalty-free. VVC (Versatile Video Coding) stands out for its ability to support 8K video and immersive media, promising a significant leap in video quality and efficiency. Each codec addresses specific market needs such as reducing bandwidth, improving video quality, and supporting next-gen devices, contributing to their disruption potential in various sectors like OTT platforms, broadcasting, and mobile video.

Next Generation Video Codec Market Trend and Forecast by Technology [Value from 2019 to 2031]:

• AVC
• AV1
• HEVC
• VP9
• VVC

Next Generation Video Codec Market Trend and Forecast by Application [Value from 2019 to 2031]:

• Mobile Phone
• Computer
• TV
• Others

Next Generation Video Codec Market by Region [Value from 2019 to 2031]:

• North America
• Europe
• Asia Pacific
• The Rest of the World
• Latest Developments and Innovations in the Next Generation Video Codec Technologies
• Companies / Ecosystems
• Strategic Opportunities by Technology Type

Features of the Global Next Generation Video Codec Market

• Market Size Estimates: Next generation video codec market size estimation in terms of ($B).
• Trend and Forecast Analysis: Market trends (2019 to 2024) and forecast (2025 to 2031) by various segments and regions.
• Segmentation Analysis: Technology trends in the global next generation video codec market size by various segments, such as technology and application in terms of value and volume shipments.
• Regional Analysis: Technology trends in the global next generation video codec market breakdown by North America, Europe, Asia Pacific, and the Rest of the World.
• Growth Opportunities: Analysis of growth opportunities in different applications, technologies, and regions for technology trends in the global next generation video codec market.
• Strategic Analysis: This includes M&A, new product development, and competitive landscape for technology trends in the global 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 potential, high-growth opportunities for the technology trends in the global next generation video codec market by technology (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 technology segments will grow at a faster pace and why?
Q.3. Which regions will grow at a faster pace and why?
Q.4. What are the key factors affecting dynamics of different material technologies? What are the drivers and challenges of these material technologies in the global next generation video codec market?
Q.5. What are the business risks and threats to the technology trends in the global next generation video codec market?
Q.6. What are the emerging trends in these technologies in the global next generation video codec market and the reasons behind them?
Q.7. Which technologies have potential of disruption in this market?
Q.8. What are the new developments in the technology trends in the global next generation video codec market? Which companies are leading these developments?
Q.9. Who are the major players in technology trends in the global next generation video codec market? What strategic initiatives are being implemented by key players for business growth?
Q.10. What are strategic growth opportunities in this next generation video codec technology space?
Q.11. What M & A activities did take place in the last five years in technology trends in the global next generation video codec market?