Next Generation Video Codec in India Trends and Forecast
The future of the next generation video codec market in India looks promising with opportunities in the mobile phone, computer, and TV markets. 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 India 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.
• Lucintel forecasts that, 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 India
The growth of the next generation video codec market in India is driven by the increasing demand for high-definition video content, improved compression technology, and the proliferation of 4K, 8K, and virtual reality videos. Additionally, the development of internet infrastructure, such as 5G, along with the rise of OTT platforms, has led to a paradigm shift toward video codecs that are both efficient and scalable. This is changing the way content is created, stored, and streamed in the country, accelerating growth and development in the industry.
• Adoption of AV1 and VVC Codecs: The adoption of AV1 and VVC codecs has been steadily increasing in India due to their high compression efficiency, video quality, and improved headend efficiency. These advanced codecs enable the streaming of high-resolution content, such as 4K and 8K videos, without the excessive bandwidth consumption typically expected. This is particularly beneficial in India, where internet speeds vary widely across regions. With better compression ratios, these codecs allow service providers to meet high user demand without additional infrastructure, greatly enhancing the viewer experience.
• Growth of 5G Networks: The rapid expansion of 5G networks throughout India is outpacing the demand for video codecs. With 5G’s low latency and high data transfer rates, users can stream or watch real-time videos without concerns about buffering or reduced quality. Video codecs like AV1 and VVC are designed for these faster networks and are ideal for watching live sports, gaming, or other real-time video services. The shift to 5G will also increase the need for sophisticated video codecs and promote the expansion of video streaming and immersive media in India.
• Spurt in Demand for OTT Platforms: The sharp increase in the use of Indian over-the-top (OTT) services is another key reason for the adoption of next-gen video codecs. Indian OTT users are increasingly subscribing to platforms such as Netflix, Hulu, Amazon Prime Video, and Disney+ Hotstar, which continue to invest in better content. These platforms must stay ahead of the competition, so strategies focused on better compression, quicker delivery, and higher-quality videos are essential. The rising digital video consumption in India’s massive mobile user base requires video codecs that balance quality and data usage—advanced codecs like AV1 and HEVC are critical for these platforms to function effectively.
• Advancements in Video Conferencing Solutions: As remote working, online education, and telehealth services have surged in India, next-gen codecs have enhanced the performance of video conferencing applications. The demand for sharper and clearer video feeds, even at lower bandwidths, is now achievable with AV1 or HEVC codecs. As institutions and businesses increasingly rely on video conferencing for collaboration and communication, the adoption of these codecs will continue to grow. This development is particularly important for India, where reliable video conferencing is crucial for bridging the gap in rural areas.
• Growth of Interactive and Immersive Media: In India, the integration of augmented reality (AR) and virtual reality (VR) into interactive media has a strong market pull, driving the shift to next-gen video codecs. These emerging technologies require video streams with high quality and low latency. The advancements in codecs like AV1 and VVC address the enormous data demands of AR and VR while minimizing compression artifacts. With increasing focus on AR and VR-based gaming, education, and healthcare, the Indian market is becoming a hotspot for immersive experiences powered by these codecs.
The upcoming shifts in India’s next generation video codec market are driven by more efficient video compression, the growth of 5G networks, increased OTT platform usage, and the rise of high-quality immersive media and video conferencing. The AV1 and VVC codecs are revolutionizing the provision and consumption of video content across different parts of the country. With these ongoing transformations, India is set to undergo a major change in its digital media ecosystem, creating new avenues for innovation and growth in the video technology and streaming industries.
Recent Developments in the Next Generation Video Codec Market in India
The next generation video codec market in India has undergone various changes due to increasing demands for high-definition video, advancements in codec technology, and improved internet infrastructure. The rise of mobile data consumption in India has driven the adoption of new, more efficient video codecs that offer an enhanced user experience. Key factors shaping the evolution of the industry include OTT platforms, 5G infrastructure, and the growing digitalization of the economy.
• Greater Use of the AV1 Codec: AV1’s adoption by television and OTT providers in India has been driven by its capabilities as a new IT solution for video compression. AV1 is gaining global popularity because it reduces the bit rate, resulting in better video quality. This allows 4K and 8K videos to be compressed without sacrificing quality while staying within bandwidth limits. This is a major development for India’s growing digital ecosystem, as improvements in infrastructure are being made, even in rural areas where internet speed and data limitations exist. Platforms like YouTube and Netflix are using AV1 to improve their streaming services in countries like India.
• Expansion of 5G Service: The expansion of 5G networks across India is another crucial factor propelling the adoption of next generation video codecs, including AV1 and VVC, which are optimized for high-speed data transmission. With 5G’s ultra-low latency and exceptional throughput, users can now stream videos in high definition without interruptions, even during live gaming, video calls, and VR. As 5G continues to spread through metropolitan cities, and connectivity in rural regions improves, the demand for advanced video codecs is expected to grow to support these high-bandwidth services.
• Focus on Cloud-Based Video Solutions: The video streaming industry in India is growing with services such as Netflix, Amazon Prime, and Hotstar. These services rely on advanced video codecs to provide high-quality video content to millions of users across regions with varying internet connectivity. Cloud computing has made video content distribution more flexible, reducing the need for localized servers and enabling more efficient scaling. Advanced video codecs ensure a superior user experience and offer cost-cutting opportunities for service providers.
• Improvement in Video Conferencing Tools for Education and Business: The surge in remote work, online education, and telemedicine in India has increased the demand for video conferencing tools. Services like Zoom, Microsoft Teams, and Google Meet are using AV1 and HEVC codecs for seamless communication under restricted bandwidth conditions. This is especially vital in developing countries like India, where internet speed can be unpredictable. These codecs are improving the quality and speed of video transmission, making remote communication more effective for India’s digital ecosystem.
• Digital Infrastructure Support from the Government: The Indian government has taken steps to improve the country’s digital infrastructure through initiatives like the Digital India Program, which aims to enhance connectivity and access in rural and remote areas. This initiative also seeks to drive the consumption of online videos to new levels, increasing the demand for next generation video codecs. As the government works to expand broadband access and promote digital services, advanced codecs will be essential to manage the growing volume of video data being transmitted throughout India’s digital ecosystem.
The evolution of the next generation video codec market in India highlights the country’s progress in its digital transformation, particularly in video streaming and delivery. The growing adoption of AV1, the development of 5G networks, the rise of cloud video services, and the increasing need for video conferencing all point to a heightened focus on advanced video codecs. These developments, supported by the government’s investment in digital infrastructure, will certainly strengthen the market for video communication in India.
Strategic Growth Opportunities for Next Generation Video Codec Market in India
Shifts in media content, enhanced internet speeds, and an increasing demand for video material promise high growth potential for the Next Generation Video Codec Market across India. With the rise of mobile data consumption and overall internet usage, there is a growing need for effective video codecs that can support seamless streaming, gaming, video conferencing, and cloud services. Below are five major strategic opportunities for India’s next generation video codec market.
• Video Streaming Platforms: India’s OTT and video streaming market is one of the fastest-growing globally. Services such as Hotstar, Netflix, and Amazon Prime Video continue to expand their libraries and, in doing so, are increasingly utilizing AV1 and VVC video codecs for superior video quality. With these codecs, 4K and even 8K content can be streamed through virtually any bandwidth, even in rural areas with lower internet speeds. This improves the user experience, making it easier for users to consume content, and boosting viewer engagement and satisfaction.
• Mobile Video Consumption: As a country with the highest mobile data consumption in the world, India has a significant need for high-quality mobile streaming, gaming, and video calling. Next-gen video codecs are crucial for optimizing video delivery on mobile networks as they maintain video quality while minimizing data consumption. As mobile carriers and app developers begin using AV1, HEVC, and VVC, users will experience smoother streaming while spending less on data. This is an important opportunity, especially as mobile phones are the primary access point to digital content for many users in India.
• Telecommunications and 5G Networks: The growth of 5G networks in India is one of the most anticipated developments for the video codec market. With ultra-low latency and high-speed data, 5G will make it possible to deliver high-definition content without buffering. AV1 and VVC video codecs are optimized for 5G networks, allowing users to stream, play games, and interact with high-quality video. This development expands opportunities for content providers, mobile operators, and developers to improve video usage for consumers in India.
• Solutions for Video Conferencing: The demand for video conferencing solutions has surged in India due to the rise of remote work, online education, and telemedicine. AV1 and HEVC are two of the next-gen video codecs that provide excellent video quality, even in poor network conditions. These codecs ensure a great user experience for video calls and online meetings, especially in rural regions where internet speeds can be unreliable. The adoption of video conferencing solutions powered by advanced video codecs enables increased remote work, online learning, and virtual healthcare services across the country.
• Processing and Delivery of Video over the Cloud: India’s media and entertainment industry is a key market for cloud-based services, like many other industries. These services rely on AV1 and HEVC codecs to function within cloud environments. These codecs significantly reduce the storage and bandwidth requirements for cloud-based video delivery. The expansion of businesses into cloud environments for video processing and streaming allows for greater content distribution and compression rates, while improving video quality. This creates countless opportunities for OTT services, educational institutions, and enterprises that rely on cloud services for content delivery.
In India’s next generation video codec market, strategic expansion opportunities are driven by the growing demand for quality video in streaming, telecommunications, and cloud services. As platforms and services begin to adopt AV1 and HEVC codecs, video quality will improve, while data consumption will decrease, enhancing the overall user experience across the country. These innovations will continue to shape the digital video landscape in India, offering new solutions from mobile video use to enterprise applications.
Next Generation Video Codec Market in India Driver and Challenges
A mix of technological, economic, and regulatory factors influence the next generation video codec market in India. The expansion of internet usage, mobile data consumption, and digital infrastructure growth have made next-gen video codecs essential for high-quality video delivery. However, issues such as costs, device restrictions, and licensing permissions present challenges. Below are the primary drivers and hurdles affecting the market in India.
The factors responsible for driving the next generation video codec market in India include:
• Adoption of New Tech in Codec Processing: The development of more advanced video codecs like AV1, HEVC, and VVC is a key driver for the market. These codecs offer better compression ratios, allowing high-definition videos to be delivered with lower bit rates. In a country like India, where internet speeds are often unreliable, these technological advancements are crucial for ensuring high-quality streaming, even in areas with low bandwidth. The rise of OTT platforms, telecommunications, and mobile services in India is driving this market.
• Mobile and Internet Accessibility Growth: India’s growing base of mobile internet users makes it a prime target for the next-gen video codec market’s mobile video consumption. Mobile operators are expanding their reach and increasing data speeds, making it essential for video codecs to perform well on mobile devices. With higher video streaming, gaming, and communication quality enabled by next-gen video codecs, data usage will remain low—a critical need for India’s mobile-first population.
• Incorporation of 5G Networks: The introduction of 5G networks in India will revolutionize video streaming and communication across the country. The low latency, high data transfer rates, and superior bandwidth management offered by 5G networks are essential for next-gen video codecs. As 5G infrastructure spreads across the country, more people will be able to stream, communicate, and game in high-definition with minimal to no buffering. This shift will enable the use of advanced video codecs optimized for 5G.
• Reductions in the Pricing of Video Content Delivery: The cost of bandwidth and data transmission is a significant consideration in India, particularly in rural areas where internet speeds are slow and data is expensive. Next-gen video codecs, such as AV1 and HEVC, enable higher-resolution content streaming while minimizing data consumption without compromising on quality. This is especially important in rural regions where access to high-quality video content is limited. As demand for high-quality video increases, next-gen video codecs will become crucial for service providers looking to expand their reach cost-effectively.
• Steps Taken by the Government to Achieve Digital Transformation: The Indian government’s initiatives, such as Digital India, have promoted the adoption of new technologies and improved internet infrastructure across the nation. The increased availability of the internet and the rising demand for digital content will drive the need for advanced video codecs to support seamless streaming, conferencing, and cloud services. The government’s efforts to improve broadband access and digital services will foster innovation in the video codec market and stimulate growth.
Challenges in the next generation video codec market in India are:
• Regulatory and Licensing Obstacles: The regulatory framework regarding licensing and patents is one of the biggest barriers to implementing next-gen video codecs in India. Proprietary codecs like HEVC often come with licensing fees, which can be prohibitively expensive, particularly for smaller content businesses and OTT providers. This can make it difficult for both established and new companies to widely adopt these codecs. Open-source codecs like AV1 also face adoption challenges, such as a lack of hardware and software support.
• Device Compatibility: Another significant issue is that older devices may not be compatible with newer video codecs. Many users in India rely on smartphones, tablets, and other devices that may not support advanced codecs like AV1 or HEVC. Overcoming device compatibility barriers by upgrading to newer hardware and software will help make quality video experiences more accessible to a larger portion of the population. However, the cost of upgrading devices could limit the growth of the market.
• Fragmentation of the Market: The video codec industry in India is fragmented, with a variety of codecs offering differing features and levels of performance. The lack of standardization complicates things for content providers, who must choose the most optimal codec, while also making interoperability between devices and systems more complex. As the market evolves, there will need to be work done to establish unified standards for video codecs to simplify content delivery and reduce fragmentation.
Technological advancements, the expansion of mobile and internet service penetration, the adoption of 5G, increasing affordability, and government support are expected to drive the growth of the next generation video codec market in India. However, challenges such as regulatory issues, device interoperability, and market fragmentation need to be addressed for broader technology adoption. There are strong reasons to be optimistic about the future of next-gen video codecs in India, as investments in digital infrastructure and innovation continue to rise. Next-gen video codecs have the potential to revolutionize the video streaming and communications industries.
List of Next Generation Video Codec Market in India 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:
• Company 1
• Company 2
• Company 3
• Company 4
• Company 5
• Company 6
• Company 7
• Company 8
• Company 9
• Company 10
Next Generation Video Codec Market in India by Segment
The study includes a forecast for the next generation video codec market in India by video codecs type and application.
Next Generation Video Codec Market in India by Video Codecs Type [Analysis by Value from 2019 to 2031]:
• AVC
• AV1
• HEVC
• VP9
• VVC
Next Generation Video Codec Market in India by Application [Analysis by Value from 2019 to 2031]:
• Mobile Phone
• Computer
• TV
• Others
Features of the Next Generation Video Codec Market in India
Market Size Estimates: Next generation video codec in India 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 India 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 India.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the next generation video codec in India.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
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FAQ
Q1. What are the major drivers influencing the growth of the next generation video codec market in India?
Answer: The major drivers for this market are growing demand for better video experience, increasing mobile video consumption, and proliferation of video content across platforms.
Q2. What are the major segments for next generation video codec market in India?
Answer: The future of the next generation video codec market in India looks promising with opportunities in the mobile phone, computer, and TV markets.
Q3. Which next generation video codec market segment in India will be the largest in future?
Answer: Lucintel forecasts that HEVC segment will remain the largest segment over the forecast period due to cuts the necessary bitrate in half while maintaining similar image quality, but at the cost of more processing complexity.
Q4. Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.
This report answers following 10 key questions:
Q.1. What are some of the most promising, high-growth opportunities for the next generation video codec market in India 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?
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