Next Generation Video Codec in Indonesia Trends and Forecast
The future of the next generation video codec market in Indonesia 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 Indonesia 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 Indonesia
Rapid technological progress in video technology, the growth of the digital content market, and enhanced mobile internet penetration have been the key drivers of growth in the next generation video codec market in Indonesia. As Indonesian consumers and service providers increase their spending on high-definition and 4K videos, they are increasingly seeking more effective ways of data management and video quality enhancement. The use of next-gen codecs like AV1, HEVC, and VVC is expected to transform video streaming, mobile communication, and content distribution across Indonesia to a new level.
• Mobile Video Streaming Growth: One of the most prominent aspects of mobile video consumption is visible in Indonesia, which largely pertains to the codec market in the country. With the availability of superfast internet and affordable data packages, mobile video streaming has become a favorite pastime for the average Indonesian consumer. Next-gen video codecs like AV1 and HEVC are bitrate-friendly and allow the streaming of high-resolution videos with lower mobile data usage, thus enhancing the streaming experience. This is especially vital in a country like Indonesia, where the geography is diverse, and network speeds and data coverage vary.
• Adoption of 4K and 8K Content: With increasing demand for video content in ultra-high definition (4K and 8K), Indonesia is starting to embrace new-generation video codecs that can efficiently process these formats. VOD, OTT, AVOD, and SVOD services enable Indonesians to access 4K videos that are newly introduced to the market. HEVC, AV1, and VVC codecs reduce data usage while enabling the streaming of high-resolution content. This phenomenon is due to the increased availability of 4K content on OTT services, allowing Indonesian users to enjoy higher-quality videos even on mobile networks with restricted bandwidth.
• Growth of 5G Networks: The launch of 5G networks in Indonesia is in progress, along with the deployment of services providing ultrafast connectivity and low-latency services to users. These changes are driving the need for video codecs optimized for high-speed and low-latency regions. Video streaming, AR, and VR powered by enhanced 5G networks will see tremendous improvements. AV1 and VVC codecs will facilitate the delivery of ultra-high-resolution video to users over 5G networks, fostering a subsequent rise in content consumption and interactivity.
• OTT and Streaming Service Expansion: OTT platforms such as Netflix, Disney+, and local players like Video and GoPlay are growing their active users in Indonesia at an aggressive rate. However, these services are overspending on infrastructure for their streaming needs, as these markets do not have the necessary internet speed. Next-generation video codecs like AV1 and HEVC are capable of optimizing videos for lower bandwidth conditions while ensuring HD streaming. Thanks to these codecs, streaming services can now reach people across rural areas where internet signals are weaker while accommodating urban areas with high-speed connections.
• Cloud-Based Video Solutions for Enterprises: Cloud technology adoption across media, education, and entertainment industries is rapidly increasing in Indonesia. Video streaming, conferencing, and content management become scalable due to cloud-based video delivery solutions. As cloud storage becomes more widely available, the need for advanced video codecs that offer faster storage and processing speeds is increasing. For Indonesian companies, the integration of AV1 and HEVC codecs with cloud infrastructure is a much more versatile and economical way to effortlessly deliver high-quality videos to users.
The latest trends in the next generation video codec market in Indonesia show an increased demand for high-quality video experiences due to mobile streaming, 4K/8K, and 5G adoption. With the continued growth of OTT, cloud services, and mobile video consumption, next-gen codecs such as AV1, HEVC, and VVC are becoming indispensable for effective content delivery and data economization. These trends may transform content consumption in Indonesia, but new opportunities are also emerging for businesses to captivate consumers with sophisticated video offerings.
Recent Developments in the Next Generation Video Codec Market in Indonesia
Indonesia is witnessing notable updates in the next generation video codec market, driven by the demand for high-quality video streaming, the expansion of mobile networks, and the increasing appetite of consumers seeking better video experiences. Local service providers, OTT platforms, and enterprises in the region are adopting next-gen video codecs like AV1 and HEVC, enabling exceptional quality videos with minimal data usage. Below are five major updates shaping the market in Indonesia.
• Integrating AV1 into Streaming Services: The adoption of the AV1 codec in Indonesia is growing on major streaming platforms like YouTube and Netflix. AV1 is ideal for underserved regions due to its ability to provide high-quality video while operating on lower bandwidths. With AV1, streaming services in Indonesia can decrease data consumption while providing HD video content, making it easier for users on slow mobile networks to access such services. This change is also helping platforms in Indonesia remain competitive at the global level in streaming AV1’s adoption in Indonesia’s video content.
• Expansion of 5G Deployment and Its Effects on Video Streaming: The advancement of 5G networks in Indonesia is moving at a rapid pace, positively affecting video streaming in the country. With 5G offering ultra-low latency and increased speeds, next generation video codecs like AV1, HEVC, and VVC are being deployed on the networks for easier streaming services. These codecs are optimized for high-speed 5G environments, allowing users to enjoy virtually instant access to high-definition video with almost no buffering. As more areas are covered by 5G in Indonesia, a greater number of people will be able to enjoy better-quality videos on their mobile phones.
• Shift Towards Cloud-Based Video Delivery for Enterprises: Shifting to cloud-based video services is advancing steadily in Indonesia, particularly among media firms, educational institutions, and corporate organizations leveraging cloud infrastructure for content delivery. New-generation video codecs are required to enhance cloud video solutions as they focus on high-quality video delivery and operational cost control. Indonesian companies continue to embrace AV1 and HEVC codecs in the cloud, allowing them to scale streaming and conferencing services to various internet conditions without compromising video quality.
• Expansion of Local OTT Platforms: In Indonesia, the demand for video content has increased so rapidly that it has led to the expanded use of local OTT platforms. Services such as Vidio, GoPlay, iFlix, and others are focusing on developing new-generation video codecs to ensure their content is compatible with smartphones and smart televisions. With the adoption of AV1 and HEVC, these services can enhance their streaming video offerings to compete against international businesses like Netflix and Amazon Prime, while also meeting the local tastes and demands.
• Adoption of HEVC for Live Streaming Services: HEVC is now the preferred codec used by live streaming service providers in Indonesia because it delivers greater video compression with good quality in real-time. Indonesian platforms specializing in gaming and entertainment are utilizing HEVC to deliver uninterrupted broadcasts of high-quality video with minimal buffering. This is positioning Indonesia’s live streaming industry to meet the growing demands for high-definition and ultra-low-latency broadcasts, particularly in esports and gaming, which are rapidly rising in popularity among the youth.
AV1, HEVC, and VVC codecs are now critical for the video streaming, mobile communications, and content delivery industries in Indonesia, and the next generation video codec market will continue developing in the country. The growing adoption of these codecs is positively impacting video quality, data consumption, and user experience, along with new technological developments like 5G and cloud services. Live streaming platforms and other businesses in Indonesia have the opportunity to dominate the market by investing in next-gen video codecs and using them to engage their user base with more accessible and higher-quality video content.
Strategic Growth Opportunities for Next Generation Video Codec Market in Indonesia
The market for next generation video codec in Indonesia is poised for significant growth, driven by advances in the digital economy, the increasing consumption of high-definition content, and improvements in mobile and broadband networks. The primary growth opportunities lie in optimizing video delivery over mobile networks, cloud services, OTT platforms, and 5G, as well as expanding live streaming. These advancements will open new opportunities for content delivery and enhance efficiency within Indonesia’s tech ecosystem, improving the overall experience for both businesses and consumers.
• Mobile Video Streaming Optimization: Indonesia stands to benefit significantly from next generation video codecs in the mobile video consumption sector, the fastest-growing segment of the Indonesian economy. With the growing adoption of mobile video consumption, there is also an increasing adoption of AV1 and HEVC codecs, which excel at video compression. These codecs play a major role in reducing bandwidth consumption while preserving video quality, which is crucial for regions with slow internet speeds. By optimizing mobile video streaming with advanced codecs, the user experience will improve, allowing more Indonesians to watch high-definition content effortlessly, regardless of their internet speed.
• Growth of OTT Service Providers: Over-the-top (OTT) platforms are expanding in Indonesia, and next generation video codecs provide a unique opportunity to improve streaming quality while reducing bandwidth consumption. Platforms like Netflix, Disney+, and local platforms such as Vidio and GoPlay are increasingly using advanced codecs to support HD and 4K content. These platforms are already providing HD content and are adopting AV1 and VVC codecs to enhance their ability to stream diverse content to rural regions of Indonesia with poor internet connections. This will allow all users to access these services regardless of their physical location or internet connectivity.
• 5G Network Adoption for Enhanced Video Delivery: The introduction of 5G networks in Indonesia presents a significant opportunity for services that leverage next generation video codecs. With 5G technology offering rapid speeds and ultra-low latency, the use of AV1 and HEVC codecs for video streaming will greatly enhance the user experience. These technologies are particularly effective for high-volume data transmission, such as 4K videos, augmented reality (AR), and virtual reality (VR), where a constant data flow is crucial. The combination of 5G and advanced codecs will transform the video delivery ecosystem in Indonesia, providing consumers with the latest technology.
• Video Systems Solutions for Businesses Using Cloud Technology: Many businesses in Indonesia are adopting cloud video solutions for video conferencing and content communication. Next-generation video codecs are essential for efficient video streaming and video conferencing in the cloud, as they use less bandwidth while offering higher efficiency. As more companies shift towards using the cloud for media storage, education, and corporate communication, robust codecs like HEVC and AV1 are vital for ensuring the delivery of high-quality video content during video conferencing and live streaming. These systems will enable Indonesian companies to expand their service offerings while maintaining high video quality and operational efficiency.
• Live Streaming and eSports Growth in Indonesia: Indonesia’s live streaming and eSports sectors are growing faster than ever, creating a substantial opportunity for next generation video codecs. The eSports community, consisting of competitive gamers, has a strong demand for high-quality video streaming with low latency during gameplay. Live broadcasts will be of significantly better quality with less buffering, and the bandwidth required will be reduced by using advanced AV1 and VVC codecs. These codecs will drive the popularity of eSports and live streaming in Indonesia, significantly improving the experience for both viewers and content creators.
Strategic growth opportunities in Indonesia’s next generation video codec market are being driven by the rise of mobile video streaming, OTT platforms, cloud services, 5G adoption, and live streaming. These trends are transforming Indonesia’s digital ecosystem by facilitating efficient video consumption, optimizing data usage, and improving usability. As these growth opportunities continue to evolve, the next generation video codec market in Indonesia is set for immense growth, creating new opportunities for businesses and making video content more accessible to consumers across the country.
Next Generation Video Codec Market in Indonesia Driver and Challenges
The next generation video codec market in Indonesia faces multiple drivers and challenges, both technological and regulatory. While mobile technology modernization, growing internet usage, and demand for high-quality video content remain key drivers, challenges such as network infrastructure limitations and regulatory hurdles are inhibiting the widespread adoption of next generation codecs. To capitalize on the expanding Indonesian video codec market and ensure the seamless flow of video content throughout the country, these factors must be addressed by enterprises.
The factors responsible for driving the next generation video codec market in Indonesia include:
• Progress in Technology: One of the primary drivers of the next generation video codec market in Indonesia is progress in technology. The development of codecs such as AV1, HEVC, and VVC enhances compression and increases video quality, which is crucial for meeting the rising demand for high-definition content. The rollout of 5G mobile networks and the increase in broadband usage heighten the need for advanced video codecs to support content delivery across various devices and networks in Indonesia.
• Increasing Usage of OTT Platforms: In Indonesia, the rise of OTT platforms is another major factor fueling the growth of the video codec market. Platforms such as Netflix, YouTube, and local services are gaining popularity and attracting significant viewership, which increases the demand for HD and even 4K content. To meet this demand, streaming platforms must implement new technologies that deliver high-quality video while overcoming bandwidth constraints. As a result, there will be greater reliance on next generation video codecs like AV1, VVC, and HEVC to ensure smooth access over mobile networks and slower platforms.
• Expansion of 5G Networks: The advancement of next generation video codec technology in Indonesia is largely driven by the adoption of 5G networks across the region. 5G’s extremely high maximum data rates and ultra-low latency can easily support video streaming, augmented reality (AR), and virtual reality (VR) applications. To fully utilize 5G networks, next generation codecs like AV1 or HEVC must be implemented due to the high bitrate requirements of these activities. These codecs, which enable high-definition video transmission at sub-optimal bitrates, are ideal for seamless video delivery on Indonesian 5G networks.
• Cloud Adoption for Video Streaming: The growing businesses and educational institutions in Indonesia are embracing cloud-based video services as the demand for efficient video codecs increases. Cloud-provided scalable video-on-demand (VOD) and real-time communication services require high-efficiency video encoding and decoding to ensure smooth operations. The increasing use of video conferencing, cloud video broadcasting, and other collaborative tools in Indonesia is shifting the focus toward modernized video codecs. For AV1, HEVC, and VVC, which are next generation codecs for cloud applications, this is highly achievable given the explosive growth of the wireless market in Indonesia.
• Increase in Mobile Device Usage for Video Consumption: The increase in smartphone users and the availability of affordable data plans have contributed to the growth of mobile video consumption in Indonesia. As users increasingly turn to mobile devices for video content, the need for advanced video codecs is rising. AV1 and HEVC offer superior compression, allowing video content to be streamed more effectively over mobile networks. This will further drive mobile video streaming and mobile entertainment applications, increasing the demand for new codecs in Indonesia.
Challenges in the next generation video codec market in Indonesia are:
• Regulatory Challenges: The next generation video codec market in Indonesia faces regulatory challenges, such as copyright issues, licensing, and intellectual property rights related to video content streaming and broadcasting. These issues can act as obstacles to adopting modern codecs like HEVC and AV1. Domestic content providers may find it difficult to implement these sophisticated codecs due to high licensing fees and complex regulatory barriers. These challenges must be addressed to fully capitalize on the potential of next generation video codecs in Indonesia.
• Inadequate Facilities: Despite the increasing number of users, Indonesia’s network infrastructure is primarily concentrated in rural and remote areas. Consequently, while advanced-generation codecs may reduce data usage, transmitting high-quality video over unreliable networks remains a challenge. These advanced video codecs cannot be widely adopted without improvements to the infrastructure, as well as more reliable internet connections. Until these infrastructural shortcomings are addressed, the growth rate of video codec supply to Indonesia’s less-developed areas will be slowed.
• The Battle Between Video Codecs: Another challenge comes from the competition among existing video codecs, including AV1, HEVC, and VVC. While each codec has unique features that may appeal to certain companies, they complicate legal engagements and interoperability, creating challenges for content providers and device manufacturers. Businesses planning to adopt next-gen technologies must evaluate performance, compression ratios, pricing, licensing, and ultimately return on investment. The competition among codecs makes it difficult for a single codec to dominate the Indonesian market.
The factors driving demand in Indonesia’s next generation video codec market—such as the expansion of OTT services, technological advancements, 5G adoption, and cloud video services—are all contributing to the adoption of more sophisticated video codecs in the region. However, issues such as the regulatory framework, existing network infrastructure constraints, and competition between codecs may delay adoption timelines. Addressing these issues is essential for fully leveraging the potential of next generation video codecs, and this is particularly true in Indonesia.
List of Next Generation Video Codec Market in Indonesia 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 Indonesia by Segment
The study includes a forecast for the next generation video codec market in Indonesia by video codecs type and application.
Next Generation Video Codec Market in Indonesia by Video Codecs Type [Analysis by Value from 2019 to 2031]:
• AVC
• AV1
• HEVC
• VP9
• VVC
Next Generation Video Codec Market in Indonesia by Application [Analysis by Value from 2019 to 2031]:
• Mobile Phone
• Computer
• TV
• Others
Features of the Next Generation Video Codec Market in Indonesia
Market Size Estimates: Next generation video codec in Indonesia 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 Indonesia 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 Indonesia.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the next generation video codec in Indonesia.
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 Indonesia?
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 Indonesia?
Answer: The future of the next generation video codec market in Indonesia looks promising with opportunities in the mobile phone, computer, and TV markets.
Q3. Which next generation video codec market segment in Indonesia 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 Indonesia 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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