Next Generation Video Codec Market Size, Share, Growth, and Industry Analysis, By Type (AVC, AV1, VP9, VVC and Others), By Application (Mobile Phone, Computer, TV and Others) and Regional Insight and Forecast to 2033

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NEXT GENERATION VIDEO CODEC MARKET OVERVIEW

The next generation video codec market size was valued at approximately USD 4.27 billion in 2024 and is expected to reach USD 25.77 billion by 2033, growing at a compound annual growth rate (CAGR) of about 22.1% from 2025 to 2033.

Next Generation Video Codec actually encompasses the new video compression techniques that have been created to achieve much smaller data to store or transmit video clips with much higher picture quality than what is required by the existing standards. About these codecs they said they are needed as there is increased demand for quality videos like 4K, 8K, VR and other videos over a limited bandwidth connection.

COVID-19 IMPACT

Market Growth increased by the Pandemic due to Increased Demand for Streaming Services

The global COVID-19 pandemic has been unprecedented and staggering, with the market experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. The sudden market growth reflected by the rise in CAGR is attributable to market’s growth and demand returning to pre-pandemic levels.

With the rise of more lock down measures and social distancing the trends of where people are watching their most liked movies and series are through Netflix, Amazon prime and YouTube among others. It also upped the demand for practicing better-optimized ways of moving video loads because they offset the traffic problem and offered reasonably good video quality taking into consideration the channel constraints.

LATEST TRENDS

Adoption of Versatile Video Coding (VVC or H.266) to Propel Market Growth

There is another one existing in the Next Generation Video Codec market known as H. 266 or the Versatile Video Coding or VVC which has the record in improving the efficiency of the video coding with high picture quality.  VVC, which has become the second successor to the HEVC (also known as H. 265), comes with enhanced compression performance of more than per cent better than the original HEVC, resulting in almost half the data rates with improved image quality. This efficiency is even more important in the age when high-quality content like 4k, 8k, as well as other 360-degree videos start gaining popularity.

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NEXT GENERATION VIDEO CODEC MARKET SEGMENTATION

By Type

Based on type the market can be categorized into AVC, AV1, VP9, VVC and Others.

• AVC- AVC is also known as H. 264 is among the most used codecs in video compression across the globe. It is the older version of other codecs like the HEVC and the VVC.

• AV1- Another open source video codec is AV1, contributing companies of which come together to make up the Alliance for Open Media which consist of Google, Netflix, Microsoft and so on.

• VP9- VP9 is an open source video codec which is developed by Google as a successor of VP8. It is mostly used on youtube and is compatible with several browsers.

• VVC- VVC, also termed as H. 266, is the most recent video codec standard and it was released in future to HEVC, H. 265. It was established in an attempt to cater for the need for better quality videos and improved compression.

By Application

Based on application the market can be categorized into Mobile Phone, Computer, TV and Others.

• Mobile Phone- AV1 and VVC codecs are the further development of HEVC, and all of them are necessary for streaming high definition and 4K material on mobile devices with minimal amounts of data usage.

• Computer- Video editors, and content creators use the new generation codecs because in editing and rendering fast or high-resolution files the need is evident. These codecs assist to minimize the size of the files while at the same time maintaining the quality.

• TV- Modernization codecs are employed in broadcasting to deliver high entertainment video content including 4K and 8K television over conserve bandwidth. This is crucial especially when sending high definition data to Smart TVs for display.

DRIVING FACTORS

Rising Demand for High-Resolution Content to Drive Market Advancement

One of the key driving factors in the Next Generation Video Codec market growth is the Rising Demand for High-Resolution Content. High-definition images and large screen displays are becoming increasingly popular, which is a leading indicator of an increasing demand for next generation video codecs since they are most effective at handling high resolution videos. With the clients opting for 4K, 8K and even higher resolution content for their videos, the amount of data to store and transmit these videos becomes massive. Fixed video codecs work sub-optimally when it comes to optimizing picture quality with files’ size and bandwidth constraints.

Expansion of Video Conferencing and Remote Work to Expand the Market

The enhancement of the faculties of Video Conferencing and other work from home paradigms makes the Next Generation Video Codec an important market driver due to the necessity of digital tools across sectors. Following the COVID-19 breakouts as well as the realization of the benefits of remote work to companies, educational institutions, not to mention social meetings, video conferencing apps such as Zoom, Microsoft Teams, and Google Meet have become rampant.

RESTRAINING FACTOR

High Development and Implementation Costs poses potential Impediments to Market Growth

However, high development and implementation costs are a major push back in the Next Generation Video Codec market since it raises the barrier to entry and the rates of adoption that can be made. The design of high efficiency video codecs requires significant investment in the research, in the creation of the algorithm and extensive testing to achieve the superior and mutual compatibility. Also, the incorporation of these new codecs on the existing actual client solutions and framework entails further spending on hardware, software, and probably license costs of the new codecs.

NEXT GENERATION VIDEO CODEC MARKET REGIONAL INSIGHTS

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North America to Dominate the Market due to Technological Advancements

The market is primarily segregated into Europe, Latin America, Asia Pacific, North America, and Middle East & Africa.

North America has emerged as the most dominant region in the Next Generation Video Codec market share due to a convergence of factors that propel its leadership in this dynamic industry. The Americas and especially North America which constitutes mainly the United States is well known to be in advance in issue of technology advancement and discovery. This region incorporates many big tech firms and research organizations that play a significant role in formulation of video codec solutions.

KEY INDUSTRY PLAYERS

Key Industry Players Shaping the Next Generation Video Codec Market through Innovation and Market Expansion

The Next Generation Video Codec market is significantly influenced by key industry players that play a pivotal role in driving market dynamics and shaping consumer preferences. These key players possess extensive retail networks and online platforms, providing consumers with easy access to a wide variety of Next Generation Video Codec options. Their strong global presence and brand recognition have contributed to increased consumer trust and loyalty, driving product adoption. Moreover, these industry giants continually invest in research and development, introducing innovative designs, materials, and smart features in Next Generation Video Codec, catering to evolving consumer needs and preferences. The collective efforts of these major players significantly impact the competitive landscape and future trajectory of the market.

List of Top Next Generation Video Codec Companies

• Cisco(U.S.)
• Bitmovin(U.S.)
• Motorola Solutions(U.S.)
• CommScope(U.K.)
• Harmonic(U.S.)

INDUSTRIAL DEVELOPMENT

April 2022: This openGear card encoder is contained in a 4K/multi-channel HD, HEVC, H. 264 and MPEG – 2 encoder with SDI & SMPTE-2110 input and is known as the ‘MGW diamond+ OG’ encorder designed by VITEC.

REPORT COVERAGE

The study encompasses a comprehensive SWOT analysis and provides insights into future developments within the market. It examines various factors that contribute to the growth of the market, exploring a wide range of market categories and potential applications that may impact its trajectory in the coming years. The analysis takes into account both current trends and historical turning points, providing a holistic understanding of the market's components and identifying potential areas for growth.

The research report delves into market segmentation, utilizing both qualitative and quantitative research methods to provide a thorough analysis. It also evaluates the impact of financial and strategic perspectives on the market. Furthermore, the report presents national and regional assessments, considering the dominant forces of supply and demand that influence market growth. The competitive landscape is meticulously detailed, including market shares of significant competitors. The report incorporates novel research methodologies and player strategies tailored for the anticipated time frame. Overall, it offers valuable and comprehensive insights into the market dynamics in a formal and easily understandable manner.