Next Generation Video Codec Market in Canada

The global next generation video codec market is expected to reach an estimated $7.9 billion by 2031 with a CAGR of 22.1% from 2025 to 2031. The next generation video codec market in Canada is also forecasted to witness strong growth over the forecast period. 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 next generation video codec market in Canada 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.

Emerging Trends in the Next Generation Video Codec Market in Canada

The Canadian next generation video codec market is experiencing potential growth driven by the expansion of streaming and video-on-demand services. The demand for AV1, HEVC, and VVC codecs has increased due to the rollout of 5G services, as newer technologies prioritize efficiency in compression, resolution, and bandwidth. These emerging trends highlight Canada’s commitment to providing an enhanced video experience for its digital population.

• Advancements in Video Compression Technology: To meet the growing demand for high-quality video, innovations in compression technology are transforming the Canadian video codec market. New AV1, HEVC, and VVC codecs enable the streaming of 4K and even 8K content while reducing bandwidth consumption. Increased media acceptance of these technologies will optimize customer satisfaction, as viewers will experience improved streaming speeds, less buffering, and better video quality.
• Integration with 5G Networks: 5G technology is reshaping Canada’s video codec market by providing ultra-fast data speeds and low latency, which are crucial for real-time video streaming. Integrating 5G networks with next generation video codecs and low latency will allow the seamless delivery of 4K and 8K videos, remote gaming, and augmented reality. Content providers in Canada will be able to offer higher-quality video services as 5G infrastructure strengthens, leading to increased adoption of VR and AR. This growing popularity will create more demand for codecs that support complex video data.
• Video Processing on the Cloud: The move toward video processing on the cloud is another major development affecting the next generation video codec market in Canada. Cloud platforms enable companies to store and process large volumes of video content without needing powerful computers in their offices. Utilizing modern video codecs like AV1 and HEVC allows companies to maximize efficiency, reduce costs, and expand their service offerings. This technology is particularly useful for streaming services, schools, and media companies that need to provide performance-grade videos. More companies will continue adopting cloud technology to increase their video output while maintaining high-quality standards.
• Growth of Over-The-Top Platforms and Video Streaming: The over-the-top (OTT) market in Canada is experiencing significant growth, with platforms like Netflix, Amazon Prime Video, and Disney+ expanding their subscriber bases. As streaming services grow, there is greater pressure for content providers to enhance video quality and manage network traffic. Next-generation video codecs are critical for these platforms as they adapt to the shift towards 4K and 8K content. These codecs improve user engagement by boosting video quality and reducing buffering times, making them essential for the competition among OTT platforms in Canada.
• Adoption of Next-Gen Codecs in eSports and Gaming: The Canadian gaming sector is adopting advancements in video codecs, especially for eSports and live streaming. As competitive gaming and streaming on platforms like Twitch continue to rise, the sector requires ultra-low latency video streaming for high-definition gameplay. AV1 and HEVC next-gen codecs are designed to meet the demands of real-time, high-resolution video and are easily integrated into gaming. This technology enhances Canada’s eSports and live-streaming industries and supports the growing Canadian gaming community.

The Canadian market is witnessing the adoption of new video compression technologies, such as next generation video codecs, due to the growing demand for high-definition video streaming and immersive digital experiences. With the rapid advancements in compression technology, 5G networks, and cloud computing, high-definition video services will be adopted faster across various markets. The integration of next generation codecs in OTT services, video gaming, and live streaming will certainly make digital life easier for Canadians, ensuring that the future of video content distribution remains innovative.

Recent Developments in the Next Generation Video Codec Market in Canada

The next generation video codec market in Canada is focused on maximizing advancements from emerging regions, technologies, and expanding its market reach. The demand for higher resolution videos, combined with improvements in digital infrastructure, has driven many content providers to adopt more sophisticated video compression methods. These providers have not only improved user experiences but also benefited from increased scalability and cost efficiency through the widespread use of these codecs. As Canada grows its market share, the country is positioning itself to contribute to global video codec efforts.

• Widespread Use of AV1 and HEVC: The increasing use of AV1 and HEVC codecs is giving a significant boost to Canadian video streaming services, as these codecs are becoming more common among media enterprises such as Omni platform services and televisions. These providers are adopting these codecs in response to rising audience demand for content in 4K and 8K resolutions. AV1 and HEVC offer higher streaming speeds while reducing bandwidth costs, especially in areas with underdeveloped infrastructure. With growing adoption, Canadian video streaming services can reduce user waiting times, increase video resolution, and lower the number of servers requiring constant maintenance.
• Expansion of Network Infrastructure for 5G in Canada: Canada is investing in expanding its 5G networks, which directly impacts the need for next generation video codecs. Latency-sensitive applications, such as remote gaming, augmented reality, and live video broadcasts, require real-time, high-definition video streaming, which 5G facilitates. Advanced codecs like AV1 and VVC will be increasingly adopted by Canadian content providers, as these codecs help optimize video performance under stringent data limits while ensuring excellent video quality as 5G coverage expands. This change will enable high-quality, interactive, and immersive video applications that require rapid data processing.
• Cloud Video Processing Adoption in Canada: Cloud computing has disrupted the Canadian video processing industry, with businesses increasingly relying on the cloud for video encoding, transcoding, and content delivery. The use of AV1 and HEVC codecs enables industries to improve video processes while simultaneously lowering infrastructure costs. Cloud platforms allow media companies to scale effortlessly, meeting the growing demand for video content while maintaining high-quality standards. This transition makes the industry more efficient, enhancing the accessibility and smooth distribution of high-quality video content worldwide.
• Increased Use of OTT Platforms: The Canadian OTT market is experiencing strong growth. This surge is prompting developers to demand higher-quality video codecs. With the rise of platforms like Netflix, YouTube, and Disney+, content providers must offer audiovisual content in HD while managing bandwidth. Next-generation codecs like AV1 and HEVC enable streaming platforms to enhance video quality while reducing buffering, thus improving the user experience. The Canadian OTT market needs to adopt these codecs to ensure smooth video streaming, even with lower internet speeds.
• Advancement of eSports and Live Streaming: Canada’s live streaming and eSports sectors are benefiting from the advancements in video codecs with the adoption of next generation codecs. The rapid growth of online gaming and competitive events has created an increasing demand for high-quality, low-latency streaming services. AV1 and HEVC next generation codecs are crucial for ensuring that the high-low-latency video stream demands of users are met during live streaming and eSports events. As the Canadian video streaming industry expands for eSports and live events, these developments further strengthen Canada’s position in the evolving video codec market.

Recent trends in the next generation video codec market in Canada suggest significant progress in video quality, compression technologies, and the integration of 5G and cloud infrastructure. The growing demand for 4K, 8K, and real-time content is driving the adoption of AV1, HEVC, and VVC codecs, further solidifying Canada’s position in the global video codec market. These shifts not only benefit users but also stimulate business for content providers, ensuring a more efficient and high-quality video distribution landscape.

Strategic Growth Opportunities for Next Generation Video Codec Market in Canada

Canada is witnessing growth in the next generation video codec market due to new technology, increased demand for quality video content, and the development of high-speed networks. With the emergence of 4K/8K streaming, gaming, and live events, there is an unprecedented business opportunity for next-gen video codec adoption that allows for high compression, low latency, and enhanced user experiences. These opportunities highlight the growing need for efficient video delivery systems and underline Canada’s advancing digital media prominence.

• Adoption of AV1 and HEVC in Streaming Services: Canada’s A/V streaming market is adopting next generation codecs AV1 and HEVC at an accelerated pace. Increased streaming of 4K and 8K content is possible due to the reduced bandwidth utilization offered by these codecs. Leading service providers like Netflix and YouTube are already switching over, and it is anticipated that Canadian users will experience these improvements soon. Adopting AV1 and HEVC enables streaming services to enhance video resolution, boost no-buffer rates, and improve overall quality during periods of low connectivity. This represents a unique opportunity in the saturated Canadian OTT market.
• 5G Network Expansion and Its Effect on Video Delivery: The introduction of 5G networks across Canada is creating space for the adoption of futuristic video codecs. 5G offers high-speed connections with low latencies, which are essential for real-time video applications such as remote gaming, live streaming, and augmented reality. When combined with AV1 and VVC codecs, Canadian content providers will be able to deliver high-definition video experiences without excessive buffering. This will increase the demand for high-quality interactive video content, which will, in turn, assist industries like entertainment and education in transitioning to advanced video codecs.
• Cloud-Based Video Solutions: There is a significant shift towards cloud-based video processing, creating crucial opportunities for next generation video codecs in Canada. With the help of cloud platforms, businesses can now store, encode, and distribute high-definition video content, saving time and costs while increasing flexibility. Next-gen video codecs like AV1 and HEVC thrive in cloud environments due to increased compression and improved quality. Canadian businesses will continue embracing cloud solutions, driving demand for advanced codecs in the media, education, and OTT industries while optimizing infrastructure and video delivery.
• Gaming and eSports: Like other sectors, the demand for video streaming solutions in Canada’s gaming and eSports industries has rapidly increased. Gamers and eSports fans require high-quality video streaming to enhance their viewing or gaming experiences. AV1 and HEVC are ideal for these high-demand applications because these next generation codecs enable fast video streaming with no lags or interruptions. Canadian providers and businesses will need to adopt these codecs to keep up with the growing popularity of eSports and gaming while improving the overall user experience.

Technological advances, the proliferation of 5G networks, and the increasing need for high-quality video content in various sectors are creating strategic growth opportunities in Canada’s Next Generation Video Codec Market. Next-gen codecs, AV1, and HEVC are crucial for optimizing video delivery and improving user experiences across streaming services, video conferencing, cloud solutions, and even gaming. With these opportunities unfolding, Canada is set to lead the international digital media industry by delivering high-quality video services to its citizens.

Next Generation Video Codec Market in Canada Drivers and Challenges

Technological, economic, and regulatory changes are shaping the next generation video codec market in Canada. The increased demand for high-quality video content, coupled with improved digital infrastructure, makes the adoption of next-gen codecs like AV1, HEVC, and VVC a necessity for effective video content delivery. However, issues related to licensing, interoperability, and the need for continuous innovation in video processing remain significant challenges for the market. These issues and opportunities are critical for Canadian video codec businesses.

The factors responsible for driving the next generation video codec market in Canada include:

• Technological Innovations: Technological innovations play a crucial role in shaping the Canadian video codec market. The introduction of new codecs such as AV1, HEVC, and VVC adds value by offering superior compression ratios, improved video quality, and lower bandwidth utilization to meet the soaring demand for high-definition content. These developments enable the streaming of 4K and even 8K video content with incredibly low data consumption, drastically enhancing the efficiency of video delivery. With Canada’s ongoing investment in advanced network infrastructures like 5G, there will be increasing demand for these sophisticated codecs, propelling the market forward.
• Growth of 5G Networks: The Canadian 5G network expansion is stimulating the market for next generation codecs. 5G offers very high speeds and low latency, making it possible to stream HD videos, as well as enabling remote gaming, augmented reality, and even virtual reality applications. Next-generation AV1 and VVC codecs are fundamental for achieving good video quality over 5G networks without performance setbacks. As 5G coverage increases across Canada, the demand for efficient video AV coding and decoding will continue to rise.
• Increasing Demand for Premium Video Quality: Alongside Canadian consumers’ growing desire for more than 4K video content, there is an increasing emphasis among content stakeholders to provide 8K video. Achieving this requires a shift to efficiency-focused compression standards, and the adoption of next generation codecs enables Canadian businesses to offer quality streaming with lower bandwidth and infrastructure costs. OTT platforms, gaming, and eSports are rapidly becoming mainstream, so the demand for video codecs will need to be satisfied and maintained, further encouraging the development of the Canadian video codec market.
• Cloud-Enabled Video Services: Canada’s video codec market is profoundly influenced by the proliferation of cloud-based video solutions. Encoding and transcoding for HD video content is a vital resource for Machine Learning models, which cloud services support significantly. Next-gen codecs like AV1 and HEVC work best in cloud environments as they facilitate video processing and delivery with better compression and quality. The shift towards cloud services for video distribution will intensify competition among Canadian businesses to adopt newer, more efficient codecs, benefiting the growth of the Canadian video codec market.

Challenges in the next generation video codec market in Canada are:

• Regulatory and Licensing Challenges: In Canada, the adoption of advanced video codecs isn’t as widespread due to regulatory challenges and licensing restrictions. Content providers cannot fully leverage proprietary codecs like HEVC because of licensing issues. These proprietary codecs face constraints in content distribution, and standardization across codecs is lacking, narrowing the options for businesses. Moving forward, the adoption of next-gen video codecs in Canada will heavily depend on how regulatory and licensing constraints are addressed.
• Interoperability Problems: There are interoperability issues in Canada’s video codec market, especially between different video codecs and platforms. As new codecs continue to evolve, seamless integration across devices, platforms, and applications becomes increasingly complex. Compatibility issues will likely cause delays in adoption as more advanced codecs enter the technology landscape. To overcome this, marketers, web publishers, and software developers must agree on standards that allow new content providers, end customers, and technology developers to easily integrate their solutions.

These key factors and obstacles impacting the next generation video codec market in Canada illustrate the opportunities and barriers present in the industry. Technological innovations, 5G networks, high-quality video content demand, and the rise of cloud computing are paving the way for market growth. However, challenges like licensing, regulatory restrictions, and interoperability issues must be overcome to ensure the successful adoption of next-gen video codecs. As these factors evolve, the industry will be reshaped by codecs that can deliver efficient streaming and high-quality content distribution.

List of Next Generation Video Codec Market in Canada 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 to 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:

Next Generation Video Codec Market in Canada by Segment

The study includes a forecast for the next generation video codec market in Canada by video codecs type and application.

Next Generation Video Codec Market in Canada by 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

Features of this Next Generation Video Codec Market in Canada Report

• Market Size Estimates: Next generation video codec in Canada market size estimation in terms of value ($B).
• Trend and Forecast Analysis: Market trends and forecasts by various segments.
• Segmentation Analysis: Next generation video codec in Canada market size by video codecs type and application in terms of value ($B).
• Growth Opportunities: Analysis of growth opportunities in different video codecs type and application for the next generation video codec in Canada.
• Strategic Analysis: This includes M&A, new product development, and competitive landscape of the next generation video codec in Canada.
• Analysis of competitive intensity of the industry based on Porter’s Five Forces model.

This report answers the following 10 key questions:

Q.1. What are some of the most promising, high-growth opportunities for the next generation video codec market in Canada by video codecs type (AVC, AV1, HEVC, VP9, and VVC), and application (mobile phone, computer, TV, and others)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.4. What are the business risks and competitive threats in this market?
Q.5. What are the emerging trends in this market and the reasons behind them?
Q.6. What are some of the changing demands of customers in the market?
Q.7. What are the new developments in the market? Which companies are leading these developments?
Q.8. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.9. 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.10. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?