Next Generation Video Codec in United Kingdom Trends and Forecast
The future of the next generation video codec market in United Kingdom 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 United Kingdom 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 United Kingdom
The UK video codec market is evolving rapidly due to the growing demand for better video quality, and compression, and the expansion of streaming services. The increase in internet speeds, the rollout of 5G, and the rising consumer demand for high-resolution content have placed next generation video codecs in a crucial position. These developments are revolutionizing video consumption and driving content creators to adopt modern video codecs that improve user interactions and reduce bandwidth usage.
• Increasing Need for Higher Quality Streaming Services: The surge in high-definition streaming services such as 4K and 8K content is growing in the United Kingdom and is set to grow further. This is because more advanced 4K and 8K TVs are now available, and more OTT platforms are offering ultra-high-definition content. To support this trend, next generation video codecs like HEVC and AV1 offer high efficiency in compression with low bandwidth requirements. This enables streaming platforms to provide high-quality video while ensuring an optimal user experience, satisfying both customers and service providers.
• Mobile Video Streaming Using 5G Networks in the United Kingdom: In the UK, mobile video consumption has shifted due to the rollout of 5G networks. The increased bandwidth and lower latency provided by 5G allow for seamless streaming of HD and UHD content. This creates a need for next generation video codecs that optimize video quality while minimizing data consumption. Services using HEVC and AV1 codecs are seeing a surge in mobile data traffic, enhancing the smartphone user experience.
• The Use of AV1 Codecs in Cloud-Based Video Services for Business and Content Distribution: Cloud video services are rapidly growing within the business and content distribution sectors across the UK. To meet the increasing demand for efficient video streaming services, cloud providers must use advanced video codecs such as AV1. This shifts the burden of high storage, slower encoding, and quality loss onto the service provider. The UK’s shift towards offering cloud-based video services is part of a broader trend of adopting next generation video codecs for better scalability and efficiency in cloud infrastructure.
• Surge in the Need for VR and AR Ribboned Content Formats in the UK: The expansion of the Virtual Reality (VR) and Augmented Reality (AR) industries, along with video streaming, is one of the trends the UK is witnessing. These content formats are immersive, and therefore, content that is streamed in real-time requires low-latency rendering, high-quality resolutions, and 360-degree video formats. These parameters can be achieved through high-performance video codecs. For example, the AV1 video codec is being optimized to enhance recording and ensure that edited content can be streamed interactively and immersively across multiple devices.
• Video Compression That Aids Energy Conservation: As sustainability becomes a primary goal for technology companies, energy-efficient video codecs are emerging within the UK market. Efficient video delivery at scale has made it essential for video codecs to optimize bandwidth consumption and energy use during encoding and decoding. Advanced video codecs like AV1 achieve high compression ratios while minimizing energy consumption. This development aligns with the UK’s focus on sustaining technology and reducing carbon footprints, making energy-efficient video codecs a profitable venture for content providers.
The shifts in the United Kingdom’s next generation video codec market are driven by the complex needs for quality video delivery across multiple channels. The adoption of advanced codecs such as HEVC and AV1 is crucial for meeting the expectation of more engaging, high-definition, and interactive content. These video codecs will transform video streaming from cloud-based services in the UK, promoting the quick adoption of 5G and sustaining innovation in the UK’s digital ecosystem, as well as enhancing VR user experiences and making these codecs more user-friendly.
Recent Developments in the Next Generation Video Codec Market in United Kingdom
Technological development and changing consumer habits are rapidly evolving the UK’s next generation video codec market. Significant improvements in video encoding, mobile viewing, and network infrastructure are boosting the use of HEVC and AV1 video codecs. These codecs are critical to the country’s transition to ultra-HD and 5G network adoption. The growing demand for high-quality video content is placing video codec technology at the center of improving both content consumption and delivery in the UK.
• AV1 Codec Adoption by Leading Streaming Services: AV1 codec adoption has been rising in the UK by leading streaming services like Netflix and YouTube. The new standard allows much better compression for streaming quality videos than older codecs. This is important as higher-quality videos can now be streamed while using less bandwidth. This development benefits mobile users by reducing bandwidth usage during streaming while improving the user experience. AV1 is gaining popularity among platforms in the UK due to its superior performance over existing standards and is expected to be widely adopted over the next few years.
• The Adoption of New Video Codecs: A Study of the UK’s Market: The implementation of 5G networks in the UK has led to the improvement of video codecs. While streaming ultra-high-definition (UHD) videos is seamless with 5G, effective video codecs are required to enhance video quality while reducing data consumption. The deployment of mobile devices has facilitated the widespread use of advanced video codecs like AV1 and HEVC. This will enable the UK to provide emerging technologies for high-definition videos, including 4K and 8K video codecs.
• The Implementation of HEVC (H.265) Video Streaming Codecs in the UK: The constantly increasing demand for 4K and 8K video content has led publishers and OTT platforms in the UK to adopt HEVC streams and codecs. HEVC is crucial for compressing and playing back 4K and 8K videos. Due to the growing satisfaction of viewers, many broadcasters and streaming services in the UK have begun to implement it. The main reasons for this adoption are to smoothly stream multiple high-definition video threads simultaneously and to enhance and expand content data centers.
• Movement Towards Cloud Video Processing: The migration to cloud storage is transforming how the UK video codec market operates. Cloud facilities provide video encoding and content distribution services for a wide range of UK video codec market players, enabling better efficiency and cost management. As a result, content providers in the UK are adopting advanced video codecs like AV1, which optimize the cloud. These codecs achieve high efficiency by enabling faster encoding, improving video quality, and lowering storage space costs, further optimizing cloud services. This shift to the cloud is a central development in improving video services and content availability in the UK.
• Adoption of Energy-Efficient Video Compression Codes: The focus on energy efficiency is driving innovations in video compression technologies in the United Kingdom. Growing concerns about the carbon footprint of data centers and the rising power usage for video encoding are prompting reconsideration. Multifunctional video coding AV1 is one of the newer video codecs that offers a sustainable option. By improving compression efficiency, AV1 drastically lowers energy consumption for video processing. As UK-based technology companies and content producers work towards sustainability targets, energy-efficient video codecs are rising, positioning these technologies as necessary elements of the country’s digital economy.
Recent strategies in the UK’s next generation video codec market show a clear shift towards higher video quality, more efficiency, and sustainable practices. The increased use of AV1 and HEVC codecs is reshaping the streaming environment, leading to better experiences for users across different platforms. Moreover, the UK stands to benefit from the expansion of 5G networks and cloud-based services, as well as the focus on energy-efficient video compression technologies, all of which contribute to the evolution of the video codec industry. The UK is rapidly becoming a leader in the global video streaming and technology market.
Strategic Growth Opportunities for Next Generation Video Codec Market in United Kingdom
The United Kingdom’s next generation video codec market is set for growth due to advancements in technology, increasing demand for quality video content, and the growing expansion of 5G networks. Growth in mobile video consumption, cloud services, and sustainability efforts creates innovative opportunities. The proliferation of 5G networks in the UK is facilitating the demand for newer technologies to enhance video delivery over mobile devices. The expanding need for high-definition and immersive content optimizes the utilization of codecs in video delivery and bandwidth consumption, making it possible for next generation codecs to create significant growth opportunities in the UK.
• Expansion of 5G Networks Leading to New Video Codec Development: The new-generation video codec market in the United Kingdom is poised to benefit greatly from the widespread rollout of 5G networks. 5G provides superior speeds, while geo-locations experience lower latency, which creates a need for mobile network-enabled video codecs that can manage video on mobile networks effectively. Next-generation video codecs that are expected to increase with the adoption of these codecs include HEVC and AV1. The rapid increase in available content and coverage will ensure the adoption of 4K, 8K, and VR streaming worldwide. The unmatched growth in 5G coverage will drastically increase the ease of access to mobile videos and facilitate the effortless delivery of HD quality videos on mobile devices.
• Video Processing and Delivery in the Cloud: The shift to cloud computing increases the demand for cloud services in the UK. This situation creates an opportunity for next generation video compression machines. As the industry shifts towards AV1 cloud content delivery network platforms, stronger support codecs will be required to ensure more efficient compression and increased speed of encoding. For example, AV1 increases the rate of compression, which leads to decreased storage and bandwidth expenses. Because of this shift to the cloud, businesses are increasing the number of effective codecs to improve their video delivery systems and the overall quality of their videos and the user’s experience.
• Next Generation Video Codecs for Interactive Content: In the UK, augmented reality (AR) and virtual reality (VR) content interact with users at a higher level, and complex video coding is needed to capture newer formats. These codecs should encode a high-quality omni-directional video stream at a single constant and very low latency (especially geared towards high-fidelity rendering). There is new space in AV1 for producers, developers, and streaming services to target the UK market and provide new forms of entertainment and educational interactive content.
• Sustainability in Video Streaming: The usage of energy for video encoding and streaming is escalating, giving rise to sustainability concerns within the UK’s video industry. Video codecs of the next generation, such as AV1, offer a solution to these sustainability issues as they provide high compression ratios while maintaining video quality. This dire need for sustainability opens a gap for innovators in the UK video codec market to deliver solutions that improve user experiences while also reducing the environmental effects of delivering video content. UK companies investing in energy-saving codecs stand to benefit by meeting the environmental needs of the UK.
• Growth in OTT and Subscription-Based Video Platforms: The growth of over-the-top (OTT) services as well as subscription-based video platforms in the UK creates a huge opportunity for the next generation video codec market. The expansion of these platforms to include video offerings in 4K, 8K, and even live streaming will increase the demand for advanced video codecs. OTT platforms using HEVC and AV1 codecs can increase video quality while decreasing the amount of data used. This increases the quality of service to customers while allowing service providers to prepare their facilities for an increase in OTT business.
Opportunities for strategic growth within the next generation video codec market in the United Kingdom are defined by developments in the 5G network, interactive video slideshow-based content service offerings, OTT market, sustainability goals, and cloud video services. There is an increasing consumer appetite for higher-quality videos, which necessitates the use of next generation AV1 and HEVC codecs in video delivery to boost compression ratios and reduce energy expenditure. These factors will foster growth in innovation in the economy of the UK and ensure that the country becomes a leader in video streaming technology globally.
Next Generation Video Codec Market in United Kingdom Driver and Challenges
A mix of technological, economic, and regulatory changes is affecting the next generation video codec market in the United Kingdom. Economic drivers comprise improvement in the quality of videos, the growing number of videos consumed on portable devices, and increased focus on energy-saving devices. On the other hand, there are certain challenges like bandwidth restrictions, regulatory challenges, and the need to homogenize codecs that significantly affect the market in question. All of the above-mentioned pointers need to be taken into account in order for stakeholders within the video codec market niche in the United Kingdom to plot the best strategy for growth.
The factors responsible for driving the next generation video codec market in United Kingdom include:
• Advancements in Technology Impacting Video Compression: The expansion of the next generation video codec market in the UK has been greatly impacted by the development of various and more powerful video codecs like AV1 and HEVC. These new technologies allow for better compression of videos while also improving the quality, which is extremely important now that consumers expect more 4K and 8K content than ever before. The expansion of video content comes with greater bandwidth requirements, so codecs capable of limiting data usage without compromising quality are critical. This advancement in technology is fundamentally altering the landscape of the streaming industry and enabling content providers to offer a high-quality viewing experience with lesser bandwidth.
• Next-Gen Video Codecs Will Be in High Demand with the Increasing Popularity of Immersive VR and AR Content: As VR, AR, and other high-definition content formats such as 4K and 8K grow in popularity and usage, the demand for advanced video codecs in the UK will exceed expectations. These formats are extremely bandwidth-intensive and require video codecs capable of special handling to ensure quality preservation throughout the entire process. As consumers continue to raise the bar on the level of content immersion and richness they want, service providers and video content creators will be forced to invest in new video codecs to guarantee satisfaction.
• Expansion of 5G Networks and Mobile Video Consumption: The UK’s expansion of 5G networks is profoundly affecting the video codec industry. With 5G’s increased speed and reduced latency, mobile video consumption is expected to grow greatly. This increases the need for mobile codecs that can perform efficient video streaming of high-definition quality content on mobile networks. Next-generation video codecs like HEVC and AV1 will be essential in providing mobile users with an effortless mobile video experience, which in turn makes 5G a considerable motivator for the adoption of mobile technologies in the UK market.
• Economic Pressure on Content Providers to Optimize Bandwidth Usage: UK-based content providers are becoming more cost-sensitive with regards to delivering highly engaging video content. They are under pressure to increase the efficiency of their bandwidth utilization. AV1 and HIMIW4 video codecs have a lot of potential to drastically decrease expenses by minimizing the amount of data sent over the network without compromising video quality. As streaming platforms and broadcasters attempt to maximize revenues while maintaining quality content, these video codecs will have a major impact on enhanced video streaming, lowered operational expenses, and improved sustainability of video delivery networks.
• Mandating a Shift Towards Sustainable Technology: The next generation video codec industry in the UK is influenced by regulatory factors as well. There is a clear political will in the UK government to manage fossil fuel use, and this extends to the energy consumption of the technology industry as well. With increased video streaming comes the increase in energy needed for video encoding and transmission processes. This regulation is creating a market for energy-efficient video codecs like AV1, which have higher compression ratios and consume less energy. Those content providers who embrace these technologies will be in a stronger position to meet the regulations and serve the environmentally conscious consumers.
• Limits on Bandwidth and Network Cloistering: In spite of improvements in video codec technology, bandwidth and network limits remain problems in the UK. Although AV1 and other next generation video codecs reduce the required bandwidth for streaming excellent quality video content, the current network infrastructure still lags behind in supporting 4K, 8K, and VR omni content. This will pose problems in the quality of the video broadcast in places where the network infrastructure is weak. Content providers and telecom providers will have to collaborate to ensure that the video codec can be used optimally in different network conditions.
Challenges in the next generation video codec market in United Kingdom are:
• Issues in Interoperability and Standardization: The UK video codec market is challenged by the lack of a comprehensive codec format. Various devices and platforms might use different supported codecs, which makes it difficult to distribute video content to different devices and platforms. This requires collaboration from all parts of the industry to develop universal standards for video codecs. If standards for content delivery are not developed, content providers and device manufacturers will face interoperability challenges in a diverse UK market.
• Barriers to Adoption within Existing Systems: Although next generation video codecs are expected to improve a lot, many existing systems and devices use older codecs like H.264. Assuming the advancements from H.264 to AV1 and HEVC, there are massive changes required to IT infrastructure, physical infrastructure, and even hardware of devices. These changes in infrastructure require a lot of funds, time, and effort. The UK video market suffers because companies need to support and maintain older technologies while adopting new video codecs. Overcoming these challenges will delay the adoption of next generation video codecs.
It is clear that all the fundamental aspects, including the growing developments in technology, the use of videos on mobile devices, and the expansion of 5G, are huge factors for growth in the UK next generation video codec market. However, bandwidth constraints, legal obligations, and the call for a comprehensive set of regulations pose difficulties. By tackling these challenges and harnessing the growing potential, the UK can work towards shaping the landscape of video streaming, ensuring that more advanced video codecs are instrumental in video streaming provision and serving the needs of the modern user.
List of Next Generation Video Codec Market in United Kingdom 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 United Kingdom by Segment
The study includes a forecast for the next generation video codec market in United Kingdom by video codecs type and application.
Next Generation Video Codec Market in United Kingdom by Video Codecs Type [Analysis by Value from 2019 to 2031]:
• AVC
• AV1
• HEVC
• VP9
• VVC
Next Generation Video Codec Market in United Kingdom by Application [Analysis by Value from 2019 to 2031]:
• Mobile Phone
• Computer
• TV
• Others
Features of the Next Generation Video Codec Market in United Kingdom
Market Size Estimates: Next generation video codec in United Kingdom 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 United Kingdom 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 United Kingdom.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the next generation video codec in United Kingdom.
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 United Kingdom?
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 United Kingdom?
Answer: The future of the next generation video codec market in United Kingdom looks promising with opportunities in the mobile phone, computer, and TV markets.
Q3. Which next generation video codec market segment in United Kingdom 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 United Kingdom 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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