Next Generation Video Codec in South Africa Trends and Forecast
The future of the next generation video codec market in South Africa 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 South Africa 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 South Africa
The next generation video codec market in South Africa is developing as the country’s digital ecosystem grows, with more people using streaming platforms and sophisticated media technologies. The expansion of OTT services, enhancement of mobile broadband services, and the increasing interest in superior content are driving the demand for effective video codecs. These developments are particularly important in light of South Africa’s efforts to strengthen its broadband infrastructure and digital services. The following trends are influencing the video codec market in the country.
• Enhanced Usage of OTT Streaming Services: As more South African users shift to OTT services like Netflix, Showmax, and YouTube, the demand for H.265 and AV1 video coding is on the rise. These services require the newest streaming codecs to ensure high-quality video streaming without significant impact on user bandwidth. With the increase in mobile data and internet usage, there will be a sharp rise in the need for video codecs that can transmit data exceeding a set limit. This allows video content delivery service providers to enhance the user experience for on-the-go video streaming on multiple devices.
• Shift Towards Mobile Video Consumption: The expansion of smartphone usage, along with the availability of 4G and 5G networks in South Africa, has increased video consumption. Next-generation codecs, such as AV1, allow mobile users to seamlessly stream HD content. These advanced video codecs enable mobile users to stream high-quality videos at low bandwidths. With the growing number of mobile users, codec developers are aiming to create optimized technologies to efficiently deliver videos on mobile devices.
• 5G Network Expansion and Low Latency Streaming: Historically, South Africa’s video streaming and telecommunications market faced many challenges, including low internet penetration, poor infrastructure, high costs, and constant power outages. However, the rollout of 5G mobile networks is expected to address these issues. The combination of 5G and next generation video codecs will enable the widespread use of augmented and virtual reality, as well as other live-streaming applications. The rise of these technologies requires an increase in data delivery speeds and a demand for ultra-low latency real-time video rendering. This development will rapidly elevate the immersive video experience.
• Expansion of Online Education and E-Learning Developments: The use of e-learning platforms in South Africa is growing, especially as more emphasis is placed on education during the COVID-19 pandemic. The provision of quality education has shifted towards remote online learning, which requires low-latency video codecs for real-time video streaming. With the increase in the use of online courses, video lectures, and interactive lessons, the demand for advanced video compression technologies will rise. This trend presents an excellent opportunity for codec developers to meet the video compression needs of educational institutions and distance learners.
• Industry Partnerships Support Digitization Adoption, Broadband Infrastructure: Initiatives taken by the South African government to improve broadband accessibility will help grow the next generation video codec market. Aimed at increasing internet usage and digital service availability, the government is driving the construction of smart cities and e-government services. These initiatives require high-standard video content for various sectors, from healthcare to entertainment. As digital services expand, the demand for versatile and adaptable video codecs that support a wide range of applications will increase.
There is a need for new video codecs in South Africa due to the rapid growth of the digital services industry, increased mobile video consumption, and the launch of next generation 5G video codecs. The adoption of next generation OTT platforms, mobile video streaming, and e-learning has created a positive demand for effective new video compression technologies. This shift has resulted in a new market that focuses on advanced video codecs, ensuring quality video delivery on various platforms and applications.
Recent Developments in the Next Generation Video Codec Market in South Africa
As the nation improves its digital infrastructure, South Africa’s video codec market is continuously growing. It is now extremely important to have efficient video codecs, as video consumption and streaming have skyrocketed. These changes will also increase the demand for strong video codecs in the entertainment and educational sectors.
• The Growing Adoption of HEVC for Video Streaming Services: With the increased use of OTT platforms by South Africans, there has been a gradual movement towards adopting HEVC (High Efficiency Video Coding). HEVC allows for streaming high-quality video content with lower bitrates, making it perfect for mobile devices with lower bandwidths. The proliferation of video-on-demand services, such as Netflix and Showmax, is accelerating this trend as these platforms utilize effective compression technologies to provide high-definition video without excessive data consumption. The result is the increased adoption of HEVC in South Africa’s digital video industry.
• Expansion of 5G Services: In South Africa, the proliferation of 5G networks is considered one of the driving forces enabling the adoption of next generation video codecs. The faster download speeds and lower latency brought by 5G facilitate the full integration of 5G-specific features into video streaming platforms. This requires the utilization of the AV1 codec, which uses VCE and custom elements to greatly improve video streaming. With all the developed 5G capabilities, South Africa could enter a new stage of fully immersive 4K and 8K streaming, along with VR and AR capabilities.
• The Government’s Role in Broadband: The strides made by the South African government in investing in broadband and digital infrastructure have improved the environment for video codec technologies. The government’s initiatives to increase internet access, especially in rural regions, are paving the way for the adoption of advanced video codec technologies. These initiatives will cater to the growing appetite for video services and applications, allowing efficient video codecs to be used for content delivery, video conferencing, education, and telemedicine throughout the country.
• Expansion of E-Learning: There has been an increase in demand for higher-quality video codecs aimed at virtual classrooms due to the emergence of e-learning platforms in South Africa, which was sparked by the COVID-19 remote teaching requirements. Microsoft Teams and Zoom are widely used by educational institutions that expect clear, low-latency video communication. This demand for technology that enables remote lessons and lectures has led to increased demand for optimized video codecs, creating greater business opportunities for codec providers.
• Mobile Video Consumption: Mobile video consumption continues to grow in South Africa due to the high rate of smartphone usage and affordable mobile data plans. As mobile video consumption increases, mobile operators and video content providers are seeking video codecs that work best with lower data consumption. More sophisticated codecs like HEVC and AV1 have become instrumental in this shift, allowing mobile users to stream video content without concerns about data caps. This pivot toward a mobile-first approach to content distribution is further propelling the adoption of next generation video codecs in South Africa.
The market for next generation video codecs in South Africa is booming due to the increasing levels of video content streaming, expansion of 5G services, government investment in infrastructure, and the pursuit of high-quality video content. The development of OTT services, mobile video consumption, and e-learning is driving the demand for effective video codecs. South Africa, a developing nation embracing digital transformation, is poised to change the landscape of the video codec market for years to come, providing new opportunities for codec operators and enhancing content distribution across various industries.
Strategic Growth Opportunities for Next Generation Video Codec Market in South Africa
In South Africa, the next generation video codec market is set to grow tremendously due to the rising digital video consumption. There is significant potential for innovation in codec technologies because of the increased focus on mobile video, streaming, and digital education. As internet infrastructure develops and the demand for quality video content increases, there is an ever-growing need for scalable and efficient codec technologies. With that said, detailed growth opportunities highlight the key factors driving market growth.
• Mobile Video Streaming: With the increase in affordable smartphones and data plans, mobile video consumption is on the rise. Many providers need video codecs that deliver high-quality videos without consuming excessive data. AV1 and HEVC codec technologies will be beneficial in the modern market as they allow providers to efficiently stream videos to mobile users. This sector has great development potential, especially in South Africa, where mobile video consumption is rapidly increasing.
• OTT Streaming Platforms: The demand for OTT streaming services such as Netflix, Showmax, and Amazon Prime Video has been increasing in South Africa, fueling the need for next generation video codecs. These platforms require video compression technologies that maintain high-quality content with limited bandwidth. As users demand higher-resolution videos, especially 4K and 8K, there will be increasing demand for HEVC, AV1, and even VVC (Versatile Video Coding). This trend opens opportunities for codec developers to customize their offerings for streaming services’ needs, thus improving the viewing experience for South Africans.
• E-Learning and Online Education: The boom in e-learning platforms and digital education in South Africa has created a need for high-quality, low-latency video streaming. As remote learning becomes more prevalent, video codecs play a critical role in enabling smooth video lectures, online courses, and real-time interaction. South African educational institutions will require next-gen codecs for efficient video compression and clear video quality, even on low-bandwidth connections. This sector presents a strong opportunity for codec developers as South Africa expands its online education facilities.
• Video Streaming and 5G: The launch of 5G networks in South Africa supports video streaming with low latency and high-definition video quality. This advancement will increase the demand for efficient video codecs that streamline data transfers without compromising video quality. High-efficiency and low-latency codec processing will be crucial for augmented reality, virtual reality, and live video streams. This development poses a challenge to codec providers, who must devise solutions capable of supporting next-gen video streaming for South African users.
• Video Conferencing and Telemedicine: Healthcare providers in South Africa, especially following the COVID-19 pandemic, have increasingly adopted telemedicine and video conferencing solutions, and this trend continues to advance in the country. They will demand sophisticated video codecs that ensure crisp and clear video transmission, even with poor network connections. The growing need for video codecs that enable high-quality video transmission while using minimal bandwidth will drive telecom service providers in South Africa to improve telemedicine and business communication services.
The consumption of video through mobile devices, e-learning, OTT streaming, and telemedicine, combined with the introduction of 5G networks, is predicted to significantly benefit the growth of the next generation video codec market in South Africa. As these sectors expand, there is an increasing need for innovative video compression technologies that can enhance quality, reduce latency, and improve the overall user experience. This shift creates new opportunities in the market, enabling codec developers to meet the unique digital needs of South African users and elevate the market to new levels.
Next Generation Video Codec Market in South Africa Driver and Challenges
A combination of factors is driving the growth of the next generation video codec market in South Africa. Mobile video apps such as YouTube, advancements in OTT services, and the expansion of 5G networks are prominent contributors. However, there are significant infrastructural challenges in South Africa that are slowing the rate of adoption of next generation video codecs. These include legacy infrastructure issues, bandwidth availability concerns, and regulatory complications. These factors are central to the market’s evolution and will determine how and when next generation video codecs will be widely adopted in South Africa.
The factors responsible for driving the next generation video codec market in South Africa include:
• Expansion of OTT Platforms: As South African users increasingly adopt OTT platforms, there is a growing demand for efficient video codecs. Streaming platforms like Netflix and Showmax require codecs that allow for multi-device streaming. This demand optimizes video delivery and reduces bandwidth usage. The growth of the South African OTT market will drive the expansion of the video codec market in the country.
• Consumption of Video on Mobile Devices: Mobile video consumption in South Africa has grown alongside the adoption of smartphones, making it a key driver of the video codec market. Mobile devices have become the primary screen for watching videos. With the increase in mobile video viewing, there is a demand for codecs that can compress HD video with low data consumption. This rising trend of mobile video consumption is an important factor for the future of video codecs in South Africa.
• Government Investment in Overhauling Broadband Infrastructure: Targeted investments by the South African government in broadband infrastructure are aiding the digital economy and improving high-speed internet access. Digital infrastructure spending is expected to increase the adoption of video conferencing and streaming, thus raising the demand for high-quality video codecs. As broadband becomes more accessible, video codec providers will have greater opportunities to implement their technologies, especially in regions with strong video service adoption but poor internet connectivity.
• Boosts from Advancements in 5G Technology: The implementation of 5G networks in South Africa is changing the video codec landscape. The new generation networks offer significantly faster speeds and lower latency, enabling a range of new applications, including real-time video broadcasting, augmented reality, and virtual reality. To fully utilize 5G capabilities, next generation codecs like AV1, which can support high data throughput with low latency, are required. The rollout of 5G technology represents a major opportunity for device manufacturers seeking to fulfill the growing market for low-latency, high-definition videos.
• The Need for Increasing Video Quality: Codec developers are tasked with encoding high-performance 4K, 8K, and even 3D video content as demand increases among South African consumers. OTT platform providers, mobile video streamers, and gamers are further driving the demand for superior video quality. This shift in demand is advancing the market towards more efficient and competitive codecs that cater to high clarity, large-sized videos. Highly innovative compression technologies are expected to be developed in response to this demand.
Challenges in the next generation video codec market in South Africa:
• Connectivity Problems and Bandwidth Limitations: In rural areas of South Africa, bandwidth limitations remain a primary concern. Although broadband infrastructure is improving, many regions still face poor access to high-speed internet, which negatively impacts video streaming and conferencing services. To deliver videos effectively, video codecs must optimize the IEEE 802.16 broadband delivery medium. These constraints pose a challenge for codec developers, who will need to create new and advanced solutions for slow, unreliable, or less capable internet connections.
• Regulatory Barriers: The adoption of video codecs faces challenges from South Africa’s regulatory environment. Existing regulations on data protection, content licensing, and internet censorship could restrict codec usage across various platforms. Companies will need to navigate these regulations while distributing video content, making the use of next-gen video codecs more complicated. The market’s growth may stagnate as regulatory constraints limit the freedom codecs need to be deployed and utilized across different applications.
• High Cost of Implementation: For smaller businesses and startups, implementing next generation video codecs can be financially burdensome. In South Africa, advanced video codecs typically require a higher infrastructural investment in proprietary hardware and software. Smaller companies, including those in emerging sectors such as e-learning or telemedicine, may find it difficult to afford such technologies, which could leave them behind in the digital era. The costs associated with implementing next generation video codecs in South Africa pose significant obstacles to widespread adoption.
Factors such as the growing mobile consumption of video and the expansion of OTT platforms are contributing to the robust growth of the next generation video codec market in South Africa. The installation of new broadband services and the rollout of 5G infrastructure will further enhance market conditions. At the same time, challenges like bandwidth constraints, regulatory issues, and high implementation costs may slow the momentum. Despite these challenges, the increasing demand for video content in almost every aspect of life makes the market highly attractive, especially for innovative codec developers.
List of Next Generation Video Codec Market in South Africa 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 South Africa by Segment
The study includes a forecast for the next generation video codec market in South Africa by video codecs type and application.
Next Generation Video Codec Market in South Africa by Video Codecs Type [Analysis by Value from 2019 to 2031]:
• AVC
• AV1
• HEVC
• VP9
• VVC
Next Generation Video Codec Market in South Africa by Application [Analysis by Value from 2019 to 2031]:
• Mobile Phone
• Computer
• TV
• Others
Features of the Next Generation Video Codec Market in South Africa
Market Size Estimates: Next generation video codec in South Africa 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 South Africa 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 South Africa.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the next generation video codec in South Africa.
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 South Africa?
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 South Africa?
Answer: The future of the next generation video codec market in South Africa looks promising with opportunities in the mobile phone, computer, and TV markets.
Q3. Which next generation video codec market segment in South Africa 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 South Africa 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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