Global Next Generation Video Codecs Market to Reach US$7.9 Billion by 2030
The global market for Next Generation Video Codecs estimated at US$2.6 Billion in the year 2024, is expected to reach US$7.9 Billion by 2030, growing at a CAGR of 20.4% over the analysis period 2024-2030. AVC, one of the segments analyzed in the report, is expected to record a 18.4% CAGR and reach US$2.6 Billion by the end of the analysis period. Growth in the AV1 segment is estimated at 20.9% CAGR over the analysis period.
The U.S. Market is Estimated at US$676.6 Million While China is Forecast to Grow at 19.5% CAGR
The Next Generation Video Codecs market in the U.S. is estimated at US$676.6 Million in the year 2024. China, the world`s second largest economy, is forecast to reach a projected market size of US$1.2 Billion by the year 2030 trailing a CAGR of 19.5% over the analysis period 2024-2030. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at a CAGR of 18.3% and 17.7% respectively over the analysis period. Within Europe, Germany is forecast to grow at approximately 14.3% CAGR.
Global Next Generation Video Codecs Market – Key Trends & Drivers Summarized
Why Are Next Generation Video Codecs Essential to the Future of Media Delivery?
Next generation video codecs are transforming how video content is compressed, transmitted, and consumed across devices and platforms. As high-resolution content (4K, 8K, HDR) becomes the norm in broadcasting, streaming, gaming, and teleconferencing, traditional codecs like AVC/H.264 are struggling to deliver efficient compression at acceptable bandwidths. Next-gen codecs such as HEVC (H.265), AV1, VVC (H.266), and EVC offer significantly better compression efficiency, reducing data sizes by 30–50% without sacrificing visual quality.
The rising demand for ultra-HD content, live streaming, video conferencing, and immersive media like AR/VR is accelerating the need for more advanced, bandwidth-efficient codecs. These new standards enable smoother streaming on limited bandwidth, faster load times, and reduced storage costs—making them crucial for content delivery networks (CDNs), OTT platforms, and mobile operators. Their adoption is further reinforced by the growth of remote work, online education, and real-time video-driven applications in both consumer and enterprise sectors.
What Technological Innovations Are Enhancing Codec Efficiency and Adoption?
Technological improvements in video encoding algorithms, AI-based content analysis, and hardware acceleration are propelling the adoption of next-gen codecs. VVC and AV1 incorporate advanced intra-frame prediction, block partitioning, and motion compensation techniques that allow for higher compression ratios while maintaining detail and reducing artifacts. Hardware support in GPUs, mobile SoCs, and smart TVs is also maturing, ensuring smooth playback and low power consumption even at high resolutions.
AI and machine learning are being employed to optimize encoding pipelines, enabling adaptive bitrate streaming that dynamically adjusts quality based on network conditions and device capabilities. Cloud-based transcoding solutions are further enabling real-time video processing for large-scale applications such as surveillance, gaming, and content distribution. Open-source development, royalty-free licensing (as with AV1), and cross-industry collaboration are driving global momentum toward standardizing and commercializing next-gen codecs at scale.
What’s Driving the Growth of the Next Generation Video Codecs Market?
The growth in the next generation video codecs market is driven by factors such as exponential video traffic growth, rising adoption of UHD and immersive formats, and the need to minimize transmission costs over congested networks. As video becomes the dominant form of internet traffic, next-gen codecs are essential to maintain performance, reduce buffering, and improve user experience across geographies. Increasing support from chipset makers and video platform providers is accelerating adoption in both consumer electronics and professional broadcasting systems.
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