Next Generation Video Codec in Japan Trends and Forecast
The future of the next generation video codec market in Japan 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 Japan 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 Japan
Japan is one of the early adopters of advanced technologies in the field of video streaming and broadcasting services. The country is incorporating newer video codecs at an astonishing rate, as its digital infrastructure is already developed, and there is an ever-increasing need for advanced video content. Japan is undergoing significant changes due to the 5G deployment and the development of cloud computing. These factors are significantly impacting video compression technology. The following trends help to understand how these factors have evolved the next generation video codec market in Japan regarding content, mobile streaming, and broadcasting.
• Adoption of 8K Video Streaming: Japan capitalized on 8K technology early by launching the world’s first 8K broadcast service through NHK, its national broadcaster. To meet the large data requirements of 8K video, next generation video codecs like HEVC and AV1 are being increasingly adopted. These codecs allow for maximum utilization of bandwidth while ensuring high-quality video delivery. As Japan overcomes the challenges of ultra-high-definition material, advanced video codecs will become more essential for sustaining 8K video streaming on traditional and OTT platforms.
• 5G Mobile Video Streaming Expansion: The rollout of 5G networks in Japan is fueling the expansion of mobile video streaming. Users on mobile devices can instantly stream high-quality video clips thanks to 5G’s ultra-low latency and high bandwidth capabilities. To further maximize data consumption, next generation video codecs are necessary. AV1 is especially useful as its enhanced compression makes high-definition mobile video streaming more efficient. The integration of 5G networks and enhanced video codecs enables mobile service providers and content platforms in Japan to offer exceptional video experiences.
• Improvements in Cloud Video Services: Cloud video services are rapidly growing in Japan, offering businesses and individuals flexible options for video content storage and delivery. The next step in video encoding involves using AV1 for cloud video services to improve cloud service efficiency by minimizing storage and maximizing transmission speed. As cloud adoption increases in Japan, particularly in the entertainment, education, and telecommunications sectors, the demand for these efficient codecs will grow as well. Using powerful infrastructure without sacrificing user experience supports the growth of Japan’s cloud video services.
• Enhanced Streaming Quality for Gaming: Japan’s gaming market is among the largest in the world, and the Japanese have embraced popular streaming platforms like Twitch and YouTube Gaming. The latest video codecs, AV1 and VVC, are revolutionizing video game streaming by introducing high compression efficiency and lower latency. These codecs also allow for higher resolution streams, such as 4K and 8K, providing visually stunning experiences without extensive buffering. As Japan’s gaming market continues to expand, the adoption of AI will be essential to meet the competitiveness of video standards sought after by gamers and content creators.
• Use of AI Technology in Video Quality Enhancement: With the help of AI, next generation video codecs in Japan are being enhanced to further optimize video quality and fine-tune encoding processes. AI algorithms automatically adjust the quality of video streams based on the user’s available network and device, improving the overall video experience. As more devices incorporate AI technology, intelligent processing will undoubtedly improve user experience and video streaming efficiency. As Japan’s technological landscape becomes smarter, it will push boundaries when optimizing video codecs for applications ranging from entertainment to enterprise video solutions.
Recent Developments in the Next Generation Video Codec Market in Japan
Japan’s market for next generation video codecs is being transformed by the adoption of 8K content, the deployment of 5G cellular networks, the increase in cloud video service usage, improvements in gaming video quality, and AI-based video processing. These trends reflect Japan’s dominance in video technology and its increasing demand for sophisticated compression algorithms aimed at high-quality content delivery. As Japan continues to advance, next generation video codecs must be incorporated to achieve greater efficiency and quality in video experiences across different industries, positioning Japan as a leader in digital media technology.
• Launch of 8K Broadcasting Services: Japan has been a leader in adopting 8K technology, with NHK, the national broadcaster, launching 8K broadcast services. The country’s pioneers also helped in the adoption of VVC and HEVC, which are the new era video codecs enabling the compression of 8K content. These video codecs facilitate the transmission of high-quality videos while reducing the required bandwidth. As a result, NHK can deliver 8K broadcasts using current technology. This milestone is a major achievement for Japan’s media sector and paves the way for more than 8K content worldwide.
• Expansion of 5G Networks and Mobile Video: With the rapid rollout of 5G infrastructure in Japan, the mobile video streaming market is undergoing a transformation. The promise of speed and low latency enables mobile users to stream high-resolution content, including 4K and 8K videos, on tablets and smartphones. By using next generation video codecs like AV1 and HEVC, achieving high video quality along with data-efficient compression is possible. This technology is extendable to mobile video services and content providers across Japan.
• Adoption of AV1 for OTT Platforms: Japanese OTT platforms are adopting AV1, an open-source codec, due to its competitive compression efficiency. AV1 allows these platforms to offer better video quality while reducing bandwidth and storage expenses. This is crucial for Japan’s growing OTT sector, which is highly competitive, where content providers must offer an exceptional user experience while managing operational costs. As AV1 adoption increases among content providers, it is gradually becoming the industry standard in Japan for streaming high-definition content.
• Cloud Video Services Growth: Japan is seeing rapid growth in cloud video services, driven by the need for reliable and scalable video storage and distribution for both users and businesses. Next-generation video codecs are essential to enhance video quality and storage efficiency. Take AV1 and HEVC, for example: these codecs enable service providers to deliver high-quality video streams while minimizing bandwidth, making cloud-based video streaming more efficient. As cloud adoption increases in Japan, the demand for advanced video codecs will continue to grow, propelling the market for next generation video compression technologies.
• Shifts in Video Streaming Improvements in the Gaming Industry: Japan’s gaming sector is experiencing a shift with the emergence of YouTube Gaming and Twitch streaming. As game content consumption transitions to video streaming, next-gen game codecs are optimizing video game streaming. These platforms can now deliver 4K and 8K gaming streams using AV1 and VVC codecs with little to no latency, placing viewers in the center of the action. These developments are crucial as Japan’s gaming market grows, marking the increasing importance of video codecs in gaming, particularly in Japan.
The Japanese market for video codecs is particularly active in the areas of 8K cable television broadcasting, 5G mobile networks, cloud-based video services, and mobile or gaming video streaming services. The logical flow of these advancements suggests that increased efficiency in video delivery, video quality, and cost savings are attainable through technological progress. As Japan continues its advancements in these areas, next generation video codecs will play a central role in the country’s efforts to lead in digital media technology.
Strategic Growth Opportunities for Next Generation Video Codec Market in Japan
The next generation video codec market in Japan is growing rapidly, driven by the demand for high-definition and ultra-high-definition content. As Japan is a global leader in technology, the country’s broadcasting, gaming, mobile video streaming, and cloud-based video services industries are adopting improved video codecs to meet consumer expectations for quality, speed, and efficiency. These emerging growth prospects within crucial segments highlight the changes occurring in video compression technologies in Japan.
• 8K Video Broadcasting: Japan has made exceptional advancements in broadcasting technology, as demonstrated by NHK’s leap into 8K broadcasting. Large-scale 8K content projects are being developed and commercialized. Japan is among the pioneers in adopting ultra-high-definition content for broadcasting. With the expansion of 8K broadcasting, next generation video codecs like HEVC and VVC play a significant role in its development. These codecs facilitate 8K content transmission while also ensuring efficient compression to reduce the impact on network infrastructure. Events such as Japan’s innovations in media and the Tokyo Olympics created a massive demand for 8K content, offering video codec providers a chance to improve both quality and efficiency.
• Mobile Video Streaming with 5G Networks: Japan is quickly adopting 5G technology, presenting substantial opportunities for mobile video consumption. Video content, including formats like 4K and 8K, can now be streamed directly to smartphones and tablets thanks to 5G’s speed and low latency. Newer generation video codecs, such as AV1, are crucial for maintaining low bandwidth while optimizing video quality. This enables mobile service providers to deliver clearer videos, even in areas with unstable network conditions. Mobile video consumption is expected to grow significantly in Japan.
• Cloud Video Services: As businesses and consumers in Japan increasingly demand scalable solutions for video storage and streaming, the adoption of cloud-based video services is rising. AV1 and similar video codecs that provide high compression are essential to reduce storage costs while enhancing data transmission speeds. These advanced codecs can be integrated into cloud-based streaming services and enterprise video solutions to deliver high-quality content while minimizing operational costs. The shift toward cloud services in Japan boosts the adoption of next generation video codecs.
• Gaming Industry and Live Streaming: Japan remains a global leader in the gaming industry, known for its innovative approach. As live streaming becomes more popular, the quality of service becomes a primary concern, alongside the video games themselves. Video codecs like AV1 and HEVC are specifically designed to enable seamless streams with high compression efficiency, allowing streams to reach 4K or 8K resolution without latency or buffering. Codec providers can greatly enhance user experience on platforms such as Twitch and YouTube Gaming, while improving the quality of live game streams.
• Artificial Intelligence for Video Optimization: The use of artificial intelligence continues to transform the way video codecs optimize and deliver video content. AI can adjust video quality on the fly and adapt streams based on network conditions. The integration of AI and automation capabilities in Japan enhances this technology, enabling rapid advancements in industries such as education, entertainment, and telemedicine. AI also allows video compression to occur without sacrificing visual quality, significantly reducing data consumption. These advancements will have a profound impact on the industry’s ability to optimize content delivery.
The market for next generation video codecs in Japan is poised for significant growth due to factors like 8K video broadcasting, mobile streaming through 5G, cloud video services, advancements in video gaming, and AI technology. These trends are driving video consumption across multiple industries, creating a strong demand for efficient, high-compression technologies. Japan is well-positioned to further solidify its role as a global leader in video codec technologies for streaming and broadcasting while developing a robust infrastructure for the industry.
Next Generation Video Codec Market in Japan Driver and Challenges
Japan’s market for next generation video codecs is shaped by the adoption of new technologies, the global economy, and relevant policies. The ongoing need for better video quality, combined with the increasing demand for efficient compression, creates a strong need for more sophisticated video codecs. However, slow infrastructure investment, changes in supply-side competitive technologies, and shifting regulations act as barriers to entry. The balance of economic and regulatory resources versus technological innovation is crucial for the industry’s growth.
The factors responsible for driving the next generation video codec market in Japan include:
• Changes in Video Quality Technology: Technological advancements in codecs are critical to meeting consumer expectations for high-definition video content and bandwidth expansion. New compression methodologies are essential due to the growth of 4K and 8K content. Japan is at the forefront of developing HEVC and AV1 codecs, which allow for lower bitrates while delivering better video quality. Technological competition in Japan continues to intensify, with the market pressing for improvements in coding efficiencies and achieving higher bitrates for television broadcasting and other applications.
• Growth of Mobile Video Consumption and 5G Technology: The introduction of 5G has positively impacted Japan’s video codec industry. The expected growth in high-speed, low-latency video streaming will enable the widespread use of mobile devices for video consumption. The rollout of 5G networks enables the streaming of 4K and 8K videos on mobile devices. The increasing popularity of smartphones and tablets drives the need for more advanced video codecs that allow data to be streamed efficiently without requiring large storage capacities. The 5G network boom presents both new challenges and opportunities for stakeholders in the video codec market in Japan, including providers, advertisers, and content creators.
• Efficient Cloud Computing and Video Storage: Cloud computing has transformed video storage and streaming by providing scalable and cost-effective solutions for businesses and individuals. Newer-generation video codecs are essential for cloud-based video services, as they reduce storage requirements without compromising quality. As cloud service adoption increases in Japan’s entertainment, education, and corporate sectors, the demand for advanced video codecs will grow. Video compression service providers will play a pivotal role in developing cloud technologies and leading the Japanese video codec market.
• Consumers Want Better Video Quality: The demand for video content and streaming services in Japan is growing rapidly, as consumers seek better video services. This demand increases the need for innovative video codecs. The rising popularity of streaming platforms like Netflix, YouTube, and domestic OTT services highlights the importance of delivering high-definition, high-quality content. Next-generation video codecs like AV1 and HEVC will benefit from the expansion in demand for high-quality video, as content distributors strive to offer better video with limited data. The pursuit of better video quality drives innovation in video codec technologies, fueling demand for improved solutions.
• Government Assistance with Media and Technology Innovation: The Japanese government has invested heavily in the development of new technologies in media, including video codecs. The demand for advanced video compression technology is supported by investments in 5G and 8K broadcasting, as well as the facilitation of digital and 8K broadcasting initiatives. Government-backed initiatives, such as NHK’s 8K broadcasting project, encourage further development of next generation video codec markets and make companies more willing to invest in new video technology research and development.
Challenges in the next generation video codec market in Japan are:
• High Infrastructure Spending: The demand for ultra-high-definition codecs presents a major challenge for Japan, given the significant infrastructure investments required to maintain the facilities necessary for high-definition and ultra-high-definition video delivery. Expenditures on 5G deployment, fiber optic network expansions, and CDN purchases are all major financial commitments. For smaller stakeholders, these costs could slow down the adoption of video codecs. Investments must be carefully planned to meet financial restrictions, and collaboration among key players in the media and telecom industries is essential for success.
• Challenges Posed by New Types of Technology: New cloud services and video compression systems like AV1 and HEVC have introduced competition and impacted the industry. There is also concern about the use of open-source and proprietary codecs developed by companies like Google (e.g., VP9), as they can pose a challenge to the adoption of industry standards. Codec providers in Japan must find ways to differentiate their products and highlight the value of their technologies compared to other available options.
• Legal and IP Concerns: Video codec competitors face challenges related to intellectual property (IP) and licensing claims on video capture systems. Codecs such as HEVC and AV1 are complex and difficult to use in Japan due to extensive licensing requirements. Additionally, concerns regarding codec standard wars and patent issues persist. For the integration of high-efficiency codecs into the Japanese market to be successful, these legal issues must be addressed.
The growth of next generation video codecs in Japan is driven by advancements in video quality, 5G development, and the expansion of cloud services. However, challenges such as high infrastructure costs, competition from other technologies, and regulatory issues remain significant. Addressing these challenges while leveraging technological advancements and government support for innovation is crucial for Japan to maintain its leadership in the video codec market. Successfully overcoming these obstacles will position Japan for even greater growth and technological advancement compared to other countries.
List of Next Generation Video Codec Market in Japan 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 Japan by Segment
The study includes a forecast for the next generation video codec market in Japan by video codecs type and application.
Next Generation Video Codec Market in Japan by Video Codecs Type [Analysis by Value from 2019 to 2031]:
• AVC
• AV1
• HEVC
• VP9
• VVC
Next Generation Video Codec Market in Japan by Application [Analysis by Value from 2019 to 2031]:
• Mobile Phone
• Computer
• TV
• Others
Features of the Next Generation Video Codec Market in Japan
Market Size Estimates: Next generation video codec in Japan 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 Japan 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 Japan.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the next generation video codec in Japan.
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 Japan?
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 Japan?
Answer: The future of the next generation video codec market in Japan looks promising with opportunities in the mobile phone, computer, and TV markets.
Q3. Which next generation video codec market segment in Japan 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 Japan 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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