Next Generation Video Codec in United States Trends and Forecast
The future of the next generation video codec market in United States 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 States 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 States
The next generation video codec market in the United States is rapidly growing due to improvements in video streaming, technologies such as 5G, and rising consumer demand for High Definition content. Video codecs are important for the efficient delivery and streaming of high-quality videos to consumers with low bandwidth usage, especially with the increasing demand for 4K, 8K, and other immersive content. These conditions support the need for more effective video compression solutions, allowing content creators, streaming providers, and telecom companies to achieve better quality for users while reducing infrastructure costs.
• Rising Use of AV1 Codec Adoption Among Streaming Providers: Streaming services in the United States are rapidly incorporating the AV1 codec into their systems because of its excellent compression rate. As the demand for 4K and 8K content grows, AV1’s more advanced compression algorithms enable platforms like YouTube and Netflix to offer high-quality videos while reducing the bandwidth required. AV1 adoption is reshaping the streaming landscape by allowing faster, cheaper, and easier video delivery.
• Expansion of 5G Networks in the USA Creating New Opportunities: 5G mobility enables seamless streaming of 4K and 8K videos on mobile devices. With increased data speeds and lower latency, mobile service providers can tap into the growing demand for mobile video. Next-generation video codecs are essential for balancing video quality and data requirements for smartphones. The integration of 5G technology is accelerating the incorporation of these codecs for mobile video streaming.
• Rise of Cloud-Based Video Processing and Storage: The shift toward remote video processing and storage is proving beneficial for the adoption of advanced video codecs in the United States. As more video content providers migrate to the cloud to facilitate content distribution, the need for faster processing, improved video quality, and more manageable storage expenses grows. Businesses are adopting cloud-based services that use AV1 and HEVC codecs to increase the supply of video services and revenues while meeting the growing demand for quality content.
• Increase in Interactive Content and Immersive Media Expectations: The ongoing development of VR and AR technologies in the US is creating the demand for interactive and immersive media experiences. Efficient and advanced video codecs are needed to support these technologies. In particular, AR and VR require codecs capable of efficiently processing high-resolution content and 360-degree video streams. As AR and VR technologies become widely adopted, video codecs optimized for these functions will become predominant in the market, driving innovation through increased efficiency in compression and latency reduction.
• Sustainability and Power Efficiency in Streaming Video Content: With the expansion of the video streaming market in the United States, sustainability is no longer optional. Video streaming companies must find ways to minimize their carbon footprint, particularly regarding the power needed to encode and deliver video content. Advanced video codecs, such as AV1, provide superior compression rates, which reduce energy usage during streaming while still providing good quality. These new video codecs, designed to use less energy, support environmental protection and benefit service providers and consumers by saving costs and promoting sustainability.
The emerging trends in the next generation video codec market in the United States identify new video compression technologies as essential in meeting the demand for immersive video content. The focus on adopting AV1, integrating 5G, providing cloud video services, and seeking energy-efficient solutions is changing how videos are streamed and consumed on mobile devices. These patterns suggest that innovation in video codecs will continue to enhance the overall consumer experience.
Recent Developments in the Next Generation Video Codec Market in United States
The next generation video codec market has witnessed major developments due to the increasing demand for high-definition content and mobile video consumption. AV1 and HEVC video codec developments are contributing to enhanced content delivery, improved video quality, and bandwidth usage reduction. More efficient video streaming, cloud services, and mobile video applications are based on these advancements through better video encoding, storage, and transmission.
• AV1 Codec Gaining Ground in Streaming Industry: AV1 has become one of the most notable achievements in compression technology in the United States, having been adopted by almost all major video streaming services, including YouTube, Hulu, and Netflix. AV1’s superb bitrate compression, coupled with improved video quality and lower performance requirements, makes video streaming processes much easier. This is increasingly relevant with the growing customer demand for advanced 4K and 8K content. Its adoption marks progress toward more economical and efficient high-quality video streaming delivery systems, which is the ultimate goal in the streaming industry.
• Expansion of 5G Networks Enhancing Video Delivery: The introduction of 5G networks across the United States has already begun transforming the landscape of the video coding industry. With 5G, mobile device users can enjoy streaming graphics-intensive videos without their devices lagging or buffering, meaning everything plays smoothly. This creates the need for mobile video codecs that utilize data smartly when transmitting HD video content. With 5G-enabled mobile video watching, other high-performance codecs will need to be adopted and supported, increasing the ease and enjoyment of consumers engaging with the product. Responsiveness will be significantly improved.
• Movement Towards the Utilization of Streaming Services for Video: Cloud-based video processing and storage are quickly becoming more popular, similar to trends in the United States. The cloud is now being used more widely, making the delivery of video content distributed by various companies and content providers much easier. This shift has led to the adoption of video codecs with high compression ratios and very low latencies. Many now recognize the advantages of AV1 and HEVC in reducing storage requirements and delivering high-quality video content. With advancements in cloud infrastructure, video codecs will become even more important in performance optimization and enhancing user experience.
• Increasing Demand for Streamable AV Content and Video Games with New Age Media Flips: The growing demand for interactive video content, especially to accommodate Virtual Reality and Augmented Reality technologies, has led to the need for efficient video codecs that can address the new engineering requirements of 360-degree video stream processing. The US entertainment and gaming markets are rapidly adapting to novel immersive media. Consumers now expect high-quality interactive video experiences as the norm. AV1 and HEVC video codecs will support these emerging content formats, allowing the smooth broadcast of high-resolution, low-latency videos, which are pivotal for immersive content. Video encoding technology will advance with this development.
• Strive for the Creation of Sustainable Video Codecs: As the sustainability of the video streaming market grows, there is increasing emphasis on energy-saving video codecs. YouTube and Netflix, among other platforms, are implementing new AV1 and other energy-efficient codecs to combat climate change. These new AV1 energy-aware video codecs reduce power expenditure on video encoding, streaming, and delivery while maintaining the best quality. This aligns with the overall focus of the United States on energy efficiency and sustainability. This shift places next generation video streaming codecs at the core of energy-efficient technology, focusing on reducing carbon emissions in video streaming services.
The recent shifts in the United States next generation video codec industry have been influenced by the desire to continuously improve high-definition video quality offerings. The usage of the new AV1 codec, the addition of 5G technology, super-fast internet, cloud video content, increased use of video games and contests, and increased focus on energy-efficient video codecs are all transforming video content consumption and distribution dynamics. In turn, these changes will transform the video experience to be more interactive, efficient, and environmentally friendly, greatly impacting streamers, mobile video content providers, and video material developers.
Strategic Growth Opportunities for Next Generation Video Codec Market in United States
The next generation video codec market in the US is projected to grow at a CAGR of more than 20% due to the increase in the utilization of high-quality video content, mobile video streaming, and new technologies such as 5G. This creates opportunities for several applications such as video streaming, mobile video, cloud services, and immersive media. The steady transition of video content toward high-resolution and interactive formats calls for newer video codecs that will enhance quality and reduce the bandwidth needed. This section analyzes important growth prospects in the US market for next generation video codecs.
• Improved OTT and Streaming Services: AV1 and HEVC codecs are likely to change video delivery for 4K and 8K streams by efficiently optimizing the data transmitted without losing quality. The increased demand for OTT platforms like Netflix, Amazon Prime, and Disney+ has led to a greater need for newer codecs that allow high-quality video streaming at minimal costs while using less bandwidth. This sector is likely to grow at the fastest rates as streaming service providers aim to simultaneously increase shipping while briskly broadcasting high-definition content.
• Expansion of Mobile Video Streaming: With the expansion of mobile video streaming and 5G networks coming online, the need for mobile-optimized video codecs will increase. Mobile network operators and content providers will need video codecs that offer high-speed video streaming while using less time and data. New mobile video codecs will enable mobile phones to stream videos in 4K and 8K resolution with minimal data usage. Users will experience seamless mobile video consumption without restrictions. There are great opportunities for developing new video codecs as mobile video consumption rises.
• Processing and Delivery of Video in the Cloud: In the US, businesses and content providers are increasingly adopting cloud-based infrastructure for hosting, file processing, and delivery of video files. Advanced codecs allow these platforms to issue high-quality videos while conserving bandwidth and file space. The advent of cloud platforms for video hosting, video on demand (VOD), and even live streaming greatly increases the need for powerful and efficient codecs. These solutions lower operational expenditures, increase scalability of resources, and improve video streaming services, facilitating more advancements in cloud video delivery.
• Interactive and Immersive Video Content: The ever-expanding gaming, education, and entertainment industries have already started capitalizing on video content that is interactive or immersive, such as VR or AR. These media types require codecs that can handle high amounts of data and 360-degree videos with no delay. The next generation video codecs will be crucial in supporting the delivery of this content, as they will allow for much more compression without placing a heavy demand on power or time. The shift towards more interactive media will require the development of more specialized codecs that can provide immersive video experiences for users.
• Energy-Efficient Video Delivery Solutions: Telecom providers and streaming platforms are focusing their efforts on energy-efficient video delivery systems and codecs because this is becoming an increasingly pressing concern. Video codecs such as AV1 or next generation codecs are the solutions because they offer low compression rates while saving energy on encoding, decoding, or even transmitting the video. In an era where sustainability is prominent in the tech industry, video codec solutions that enable eco-friendly content delivery will not only reduce operational expenses but also support sustainability goals. Over time, video service providers across the United States will benefit the most from this.
These changes will allow video codecs to control the market. They will be able to sell and control how content is consumed, shared, and edited. Streaming or mobile videos will become energy-efficient. Pouring money into these sectors will help position advanced video codecs at the forefront of the digital media landscape. With natural ecosystems and energy resources constantly depleting, the rest of the world will be forced to adopt these measures.
Next Generation Video Codec Market in United States Driver and Challenges
While developing the next generation video codec in America, stakeholders must consider economic, legal, and social factors. The rapid progress in video technologies and the introduction of 5G, combined with consumers’ desire to watch high-resolution videos, are key drivers of market growth. The lack of cooperation between different codecs and the growing complexity of modern video delivery systems are important obstacles. This section highlights how critical these challenges are for the market and examines the best available outcomes and problems posed by technological advancements.
The factors responsible for driving the next generation video codec market in the United States include:
• Improvement in Efficiency Compression Technology: Improvements in video compression technologies like AV1 and HEVC codecs are among the growth potentials of the US market. These next generation codecs offer enhanced compression, which significantly improves video quality at lower bitrates. This impacts several sectors such as video on demand, mobile, and cloud services that require HD video. Especially in a world where every bit of data is precious, the ability to serve more with less is critically important. Thus, the adoption of these new-generation codecs across multiple industries is inevitable.
• Increase in Mobile OTT and Video Streaming Services: The next generation video codec market in the United States is primarily driven by the rapid increase in OTT and video-on-demand services. Video streaming services like Hulu, Netflix, and YouTube use these codecs to dramatically improve quality while using lower bandwidth. Increased demand for 4K and 8K content will further necessitate the use of advanced video codecs to improve content quality at lower costs. With an increasing number of people streaming their entertainment, there is a growing need for advanced and efficient codecs.
• Expansion of 5G Networks: The advent of 5G networks in the US is changing the landscape of mobile video streaming. Mobile wireless projections are soaring due to 5G’s rapid speed and significantly lower latency. There is a rising demand for advanced 4K and 8K video codecs that minimize data consumption. 5G makes video streaming effortless on mobile devices, offering a prime opportunity for next generation video codecs to enable mobile video streaming on a massive scale. This growth in 5G infrastructure is driving the development of video codecs used for mobile video content.
• Cloud-Based Video Processing Demand: With the increase of cloud-based solutions within the video streaming industry, the demand for more efficient video codecs that allow faster processing while maintaining low storage requirements and high quality is growing. VOD and live streaming cloud services like Amazon Prime, Netflix, and YouTube require highly compressive codecs that optimize video file sizes without degrading video quality. As businesses continue to transition to the cloud to enable scalability, flexibility, and cost efficiency, this trend will continue. This shift to the cloud is fueling the demand for more advanced video codecs within the United States.
Challenges in the next generation video codec market in the United States are:
• Sustainability and Environmental Sustainability Issues: The increasing focus on energy technology alongside environmental concerns is another major influencer in the video codec market. Video codecs help mask energy usage in the processes of video encoding, transmission, and decoding. The sustainable movement from video service providers and telecom operators is forcing them to embrace more efficient codecs such as the lower-powered AV1, which is gaining popularity. This shift in the market is expected to lead to greater sustainability in the future.
• Video Streaming Regulation Obstacles: Regulatory video streaming schemes and policies regarding data protection and licensing present significant barriers to the growth of the next generation video codec market. Other hurdles like GDPR compliance and local content laws further complicate video delivery. Video services rely on their codecs working within these bounds without compromising video quality or performance, but even then, they try to bypass the legal issues. Newer video codecs cannot be put into service, as these laws and borders hinder market development.
• Issues Regarding Political Protection With CPA Codecs’ Encryption: The presence of different competing video codecs in the United States poses real challenges to the achievement of interoperability. Different platforms, devices, and applications that cannot provide seamless support for various codecs face compatibility issues, which can worsen the user experience. Even with AV1 and HEVC emerging as leaders, video codec adoption will remain fragmented without comprehensive standards, which increases operational costs for content providers. Solving interoperability issues will allow innovative video codecs to emerge. This challenge must be overcome to unlock the full potential of advanced video codec capabilities.
• Adoption of New Codecs Comes With Incorporate Costs: Video streaming services or telecom operators bear the brunt of the cost. These extensive expenses stem from adopting new codecs. The telecom operators or video streaming services need to allocate substantial amounts for upgrading infrastructure to host or support AV1 or HEVC-compliant codecs. These additions can be prohibitively expensive for smaller industry players due to the costs associated with implementing the necessary structural changes. Adopting these next generation codecs will surely yield long-term benefits in bandwidth consumption and video quality. However, the short-term adoption costs amid a myriad of other industry settings may prove difficult for some sectors.
The key opportunities and issues affecting the next generation video codec market in the United States tell a complex story. On one hand, ever-evolving technology, increasing uptake of video streaming and OTT services, deployment of 5G networks, cloud computing, and a focus on sustainability are propelling the market. On the other hand, regulatory hurdles, lack of standardization, and the exorbitant costs of adoption remain critical challenges. The continual progression of these issues will determine the market structure, as well as the adoption and usage of video codecs in the United States.
List of Next Generation Video Codec Market in United States 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 States by Segment
The study includes a forecast for the next generation video codec market in United States by video codecs type and application.
Next Generation Video Codec Market in United States by Video Codecs Type [Analysis by Value from 2019 to 2031]:
• AVC
• AV1
• HEVC
• VP9
• VVC
Next Generation Video Codec Market in United States by Application [Analysis by Value from 2019 to 2031]:
• Mobile Phone
• Computer
• TV
• Others
Features of the Next Generation Video Codec Market in United States
Market Size Estimates: Next generation video codec in United States 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 States 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 States.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the next generation video codec in United States.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
If you are looking to expand your business in this or adjacent markets, then contact us. We have done hundreds of strategic consulting projects in market entry, opportunity screening, due diligence, supply chain analysis, M & A, and more.
FAQ
Q1. What are the major drivers influencing the growth of the next generation video codec market in United States?
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 States?
Answer: The future of the next generation video codec market in United States looks promising with opportunities in the mobile phone, computer, and TV markets.
Q3. Which next generation video codec market segment in United States 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 States 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?
For any questions related to Next Generation Video Codec Market in United States, Next Generation Video Codec Market in United States Size, Next Generation Video Codec Market in United States Growth, Next Generation Video Codec Market in United States Analysis, Next Generation Video Codec Market in United States Report, Next Generation Video Codec Market in United States Share, Next Generation Video Codec Market in United States Trends, Next Generation Video Codec Market in United States Forecast, Next Generation Video Codec Companies, write Lucintel analyst at email: helpdesk@lucintel.com. We will be glad to get back to you soon.