Next Generation Video Codec in Saudi Arabia Trends and Forecast
The future of the next generation video codec market in Saudi Arabia 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 Saudi Arabia 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 Saudi Arabia
In relation to the Kingdom of Saudi Arabia’s Vision 2030 plan, the country is heavily investing in building a robust digital infrastructure, which in turn improves the media and entertainment industries. Saudi Arabia’s massive investments are being directed toward 5G networks, audiovisual streaming services, and other digital products or services. At the same time, with the ever-increasing demand for top-quality content, high-efficiency video codecs with advanced compression and multi-device delivery features are becoming critical. Below are emerging trends in video codecs implemented in Saudi Arabia.
• Growth of Mobile Video Streaming and the 5G Network: The Saudi Arabian market is poised for an influx of mobile video streaming applications and clip-sharing platforms with the introduction of 5G networks. Higher speeds, lower latency, and increased network capacity greatly enhance the quality of video streaming, enabling the encoding of video content into high-quality formats with smaller file sizes. These developments benefit the entertainment and education sectors, particularly with the adoption of AV1 and HEVC next generation codecs. Providing widespread access to HD virtual reality immersion is now a possibility.
• Enhanced Attention on Video Streaming Platforms - Investment in Streaming Services: Saudi Arabia has seen a sharp rise in both international and local video streaming platforms. With Shahid, Netflix, and YouTube expanding their offerings in the country, efficient video codecs are imperative for stream delivery due to bandwidth constraints. The growing demand for 4K and 8K videos, combined with the need for adaptive streaming, has led to increased usage of AV1 codecs because of their better compression rate. This trend is transforming the video streaming industry in the region, driving the expanding demand and supply of new video codecs and adaptive streaming technologies.
• Rise of Content Production and OTT Services: Saudi Arabia is witnessing the growth of new OTT platforms that focus heavily on local content due to the expansion in the local media and entertainment space. The rise of internet-enabled devices in the country means that video compression technologies need to be introduced and optimized to ensure faster content delivery. Next-generation video codecs such as AV1 and HEVC allow streaming platforms to deliver high-quality content while reducing data traffic consumption, providing clear advantages for both producers and audiences.
• Smart Cities and IoT-Driven Video Applications: The demand for advanced video codecs used in video surveillance, autonomous vehicles, and traffic management is growing due to Saudi Arabia’s NEOM smart city projects. These systems require high-efficiency video encoding for real-time video processing and transmission. HEVC and AV1 codecs, which improve the efficiency of video streaming and lower bandwidth usage, are being adopted at a greater rate for these systems. As Saudi Arabia continues its IoT initiatives and smart city projects, demand for video codecs, especially in surveillance and IoT-driven applications, will significantly increase.
• Government Initiatives and Regulatory Support: Saudi Arabia has made significant progress in fostering its digital economy by investing in ICT infrastructure and formulating supporting regulatory policies. Digitization efforts for Vision 2030 will stimulate the adoption of next generation video codecs. The expansion of media and entertainment services, along with the adoption of 5G, drives the demand for efficient video technologies and services. These developments will create new opportunities for video codec developers to provide innovative and highly demanded video services in the country.
Saudi Arabia’s next generation video codec market is changing rapidly due to notable technological advancements, the growing digital economy, and government efforts to support Vision 2030 initiatives. The emergence of 5G, the proliferation of OTT platforms, a focus on local content, smart city initiatives, and regulatory support are transforming the video codec market. These developments highlight the increasing need for efficient and high-quality video streaming solutions, encouraging confidence that innovation in video codecs in Saudi Arabia will thrive in the coming years.
Recent Developments in the Next Generation Video Codec Market in Saudi Arabia
Saudi Arabia’s video codec market has also undergone significant changes due to the rapid adoption of digital technologies, expanding mobile networks, and the demand for high-quality content across multiple media. These changes are part of the country’s broader strategy to improve its digital infrastructure and the entertainment and media industry. Below are some of the key changes shaping the next generation video codec market in Saudi Arabia.
• Deployment of 5G Networks and Improved Streaming Capabilities: 5G allows Saudi mobile users to consume videos in greater volumes than ever before. Mobile users can now effortlessly stream high-definition footage, including 4K and 8K, thanks to increased data transfer speeds and lower latencies. The AV1 and HEVC next generation video codecs are critical in optimizing video delivery and bandwidth utilization without compromising quality. These advancements have revolutionized the experience of mobile video streaming across various platforms in the country.
• Expansion of Domestic OTT Platforms: Domestic OTT services in Saudi Arabia, such as Shahid, have increased the supply of locally produced films and television shows and have greatly innovated the use of advanced video codecs. These services have a growing demand for next generation video codecs like AV1 and HEVC, as more efficient video encoding is required to deliver a seamless user experience. With the increasing demand for 4K videos and adaptive streaming, these codecs ensure fewer issues for end users, enhancing the convenience of handheld devices.
• Boosted Focus on Investment Towards Smart City Initiatives: Saudi Arabia’s investment in smart cities, such as the NEOM project, is increasing the demand for newer video codecs in IoT technologies. These smart cities rely on advanced video surveillance, traffic management, and self-driving car functionalities, all of which have critical requirements for efficient video compression and transmission. As a result, the adoption of high-efficiency video codecs is on the rise. With the expansion of smart city projects, further demand for video solutions is anticipated across various industries, including public safety, transportation, education, and healthcare.
• Support for Technology Transitions/Digital Evolution from the Government: The Saudi government has consistently promoted initiatives like Vision 2030, which have helped boost the adoption of media technologies, including next generation video codecs and other digital tools. The government’s efforts to support a knowledge economy and improve the media and entertainment industry drive the need for advanced video technologies. While still in the early stages, the availability of 5G is revolutionizing the market, offering new opportunities for media consumption and reshaping the media landscape.
• Partnerships of International and Local Content Providers: The demand for next generation video codecs has increased due to more partnerships between local and international content providers. With global streaming platforms like Netflix and Amazon Prime Video entering Saudi Arabia, there is a continuous need for new video codecs to support expanding content delivery. The combination of foreign content consumption and domestic content creation has shifted the ecosystem, making next generation video codecs essential to meet high user expectations across the country.
Developments in Saudi Arabia’s next generation video codec market show rapid growth in the digital economy. The increasing consumption of 5G, the expansion of interstate and intrastate OTT platforms, funding for smart city initiatives, government support, and local and international collaborations are all contributing to the growing need for advanced video codecs. These changes are restructuring the Saudi market, positioning it as a hub for next generation video codecs in the region.
Strategic Growth Opportunities for Next Generation Video Codec Market in Saudi Arabia
Saudi Arabia, aiming to expand infrastructure and buildings within smart clustered cities and its overall emerging digital landscape, offers various opportunities within the OTT video content sector, supported by hyper-scale global clients like Apple and OTT Reels. With the continuously growing demand for OTT platforms like Shahid, Vidyasparsh, TapTV, Net Geo, and many more, these platforms are emerging as stringent competition for Netflix and Amazon Live. Additionally, the service audience does not appear to be plateauing, meaning that further international Vidya offers are expected to be introduced.
• Video Surveillance and Smart City Projects: Saudi Arabia’s smart city initiatives like NEOM have increased the demand for advanced-generation codecs in video surveillance technologies. Monitoring, face recognition, and traffic control systems use video streaming technologies that require efficient compression technologies. The transition to real-time video streaming in smart cities requires high-level compression codecs that can maintain reasonable video quality. As cities progress into smart cities, the demand for video surveillance systems and supporting video codecs will increase, ensuring greater public safety.
• Healthcare Video Communication and Telemedicine Services: Telemedicine and remote healthcare services are gaining traction due to the modernization of the healthcare sector in Saudi Arabia. Telemedicine relies on next generation video codecs for high-quality two-way video communication between doctors and their patients. In remote consultations, diagnostics, and medical collaborations, advanced compression technology will improve the consultant’s capabilities while maintaining lower bandwidth. As the digitalization of the healthcare sector moves forward, video codecs will continue to play an increasing role in telemedicine, spurring innovative opportunities for codec developers.
• Remote Education Platforms and Online Learning: Over the past several years, the rise of online learning in Saudi Arabia has created the need for video codecs that allow for high-quality transmission of videos in online classes. HEVC and AV1 next generation codecs are required for seamless video rates and interactive lectures, as well as stream interactions at the edges of the networks. As the reach of e-learning platforms continues to grow, so will the necessity for advanced video codecs capable of providing proper video streaming and content delivery, opening new valuable prospects in the education industry.
• Mobile Video Usage and Deployment of 5G Networks: The adoption of 5G networks in Saudi Arabia will change how mobile videos are consumed as more video content can be downloaded faster, with little to no latency. Next-generation video codecs will also be required as video consumption increases and higher-quality video content is demanded in mobile devices. With the shift in mobile video consumption due to 5G, experts anticipate an increase in the need for advanced mobile device video codecs that allow for 4K and 8K video streaming. This will increase the promising opportunities for codec companies in the region.
Saudi Arabia stands ready for remarkable growth in the next generation video codec market, owing to strategic developments in several industries, such as entertainment, healthcare, and education. An increase in OTT channels, smart city initiatives, mobile video usage, and the e-learning boom will necessitate advanced video compression technologies. If the Kingdom maintains its level of investment in infrastructure, it is clear that next generation video codecs will have numerous novel applications to exploit in the country.
Next Generation Video Codec Market in Saudi Arabia Driver and Challenges
The video codec market in Saudi Arabia is affected by various technological, economic, and legal elements of the country. The increasing Saudi investment in digital infrastructure, coupled with the rising demand for quality video content, is a significant reason why the market is growing. However, the market also faces challenges, such as regulatory barriers, extremely high implementation costs, and the lack of technological interoperability. Below are the factors that create both drivers and challenges for the Saudi Arabia market.
The factors responsible for driving the next generation video codec market in Saudi Arabia include:
• Expanding 5G Networks: The Saudi Arabian 5G network rollout is one of the primary growth factors for the next generation video codec market. The increased mobile and fixed broadband capacity demands advanced video codecs like HEVC and AV1 in the region. As video streaming services become increasingly popular, the need for infrastructure capable of supporting seamless high-definition video streaming is growing. The expansion of mobile networks drives the need for efficient compression technologies capable of 4K and 8K video delivery while optimizing bandwidth usage. Next-generation codecs are being adopted in the region for these reasons.
• Support for Digital Transformation Initiatives: The Saudi government’s Vision 2030 strategy aims to transform the country by heavily investing in various sectors like media, entertainment, smart city development, and information and communication technology infrastructure. This goal, along with expansionary measures such as investments in dual fiber networks and 5G, further increases the demand for efficient compression technologies. All of these advancements, coupled with an increasing reliance on technology, paint a clear picture for the adoption of codecs like HEVC and AV1.
• The Rise of OTT Platforms and Video Content Consumption in Saudi Arabia: The rapid growth of video-on-demand services, such as local platforms like Shahid and global giants like Netflix and Amazon Prime, has driven up the demand for next generation video codecs. High consumer demand for top-quality content necessitates OTT platforms invest in reliable video codecs that can deliver 4K, 8K, and adaptive video streaming. As people’s desire for video content continues to grow, more sophisticated content compression technologies will be needed, driving market growth.
• Growing Video Quality Expectations in Media and Entertainment: In Saudi Arabia, the demand for high-quality video content has been escalating. The movement towards 4K and 8K videos in film, television, and gaming requires new video codecs on the development side, as well as improvements in video quality on the low-bandwidth side. Saudi Arabia’s entertainment industry is booming, and with it, the demand for higher-resolution streaming video codecs is rising across content delivery platforms.
• Increase in the Use of Video Surveillance and Other Smart City Projects: The construction of smart cities in Saudi Arabia, especially NEOM, is driving the demand for high-efficiency video codecs for IoT and surveillance purposes. The use of modern HD security cameras for monitoring public services like traffic, public safety, and law enforcement necessitates the use of sophisticated video compression technologies. These applications are shifting towards real-time streaming, thus requiring next generation codecs capable of compressing video data without losing quality. This shift is contributing significantly to the increase in demand for video codecs.
Challenges in the next generation video codec market in Saudi Arabia are:
• Challenges and Concerns with Laws and Data Protection: Next-generation video codecs are in huge demand, but not without regulatory challenges and concerns regarding data privacy. The Saudi Arabian government has stringent laws related to digital content and data protection, which can pose issues regarding the use and deployment of particular video compression technologies. The use of certain video codecs in healthcare, e-learning, and other sensitive fields, where confidential information is shared, could balance the priorities of ensuring data privacy and effective video delivery.
• Implementation of Advanced Video Compression Technologies: Implementing advanced video compression technologies may prove to be extremely expensive and might require significant resources to install servers, storage, or even upgrade networks. Small or medium-sized businesses might struggle with the overall adoption of next generation video codecs, especially in the media and entertainment sectors.
The factors promising growth and those posing challenges in the Saudi Arabia next generation video codec market highlight the available opportunities in the country. The government’s embrace of Vision 2030, the increased promise of 5G networks, and the rise of OTT platforms are key drivers of market growth. Notable constraints include regulatory hurdles, exorbitant implementation costs, and cross-platform interoperability. These challenges must be addressed as a primary objective to facilitate wider adoption and increase market success for next generation video codecs in the region.
List of Next Generation Video Codec Market in Saudi Arabia 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 Saudi Arabia by Segment
The study includes a forecast for the next generation video codec market in Saudi Arabia by video codecs type and application.
Next Generation Video Codec Market in Saudi Arabia by Video Codecs Type [Analysis by Value from 2019 to 2031]:
• AVC
• AV1
• HEVC
• VP9
• VVC
Next Generation Video Codec Market in Saudi Arabia by Application [Analysis by Value from 2019 to 2031]:
• Mobile Phone
• Computer
• TV
• Others
Features of the Next Generation Video Codec Market in Saudi Arabia
Market Size Estimates: Next generation video codec in Saudi Arabia 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 Saudi Arabia 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 Saudi Arabia.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the next generation video codec in Saudi Arabia.
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 Saudi Arabia?
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 Saudi Arabia?
Answer: The future of the next generation video codec market in Saudi Arabia looks promising with opportunities in the mobile phone, computer, and TV markets.
Q3. Which next generation video codec market segment in Saudi Arabia 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 Saudi Arabia 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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