Video codecs market growth to reach $6.18 billion by 2033

The projected doubling of market value highlights a critical transition in the streaming technical stack as providers prioritize bandwidth efficiency over legacy licensing. By migrating to AV1 or H.265, platforms are achieving up to 30% in bandwidth savings, which is essential for maintaining margins as 4K and 8K content consumption grows by 45%. This shift pressures the competitive landscape, where Google and Apple currently control nearly 25% of the market through integrated ecosystem strategies. Watch for AV1 hardware decoder penetration to surpass 80% of new consumer devices by 2028, which will likely trigger a broader phase-out of H.264 for premium streaming tiers.

The push toward royalty-free codecs like AV1 has accelerated across the streaming ecosystem, with major platform operators committing to hardware-accelerated encoding pipelines. In August 2026, NTT Docomo and Samsung validated a per-user 5G optimization technique that reduced throughput degradation events from 13.1% to 7.2% on Docomo's commercial network serving over 93 million subscribers in Japan, demonstrating that network-side efficiency gains complement codec-level compression to reduce per-bit delivery costs for streaming services. The result, validated in January 2026 against real traffic data, shows that AI-driven network management can prevent video buffering events before they occur, a development that directly benefits platforms deploying bandwidth-intensive 4K and 8K content encoded with AV1 or VVC.

On the licensing and business side, the economic case for AV1 over H.265 continues to strengthen as patent pool complexity weighs on adoption decisions. Samsung Electronics separately confirmed in a Korean business report that the AI-RAN optimization technology was co-developed with NTT Docomo and targets 6G-era deployment in the 2030s, positioning the work as a core technology for AI-centric networks that will carry next-generation video traffic. That forward-looking standardization effort underscores how even single-digit percentage improvements in bandwidth efficiency translate into enormous dollar savings at scale, the same logic that drives streaming platforms toward Netflix AV1 codec adoption where the absence of per-unit royalties removes a variable cost that scales linearly with subscriber growth. The joint submission to 3GPP Release 20 in February 2026 on efficient data collection methods for AI-driven network optimization signals that the standards ecosystem is actively building the delivery-layer foundation for higher-resolution video.

Technical benchmarks from the AI-RAN space provide a useful parallel for understanding codec efficiency gains. The Docomo-Samsung simulation showed that per-user behavioral modeling using anonymized MDT data reduced speed degradation events by nearly half without replacing any antenna or purchasing additional spectrum, a result that the companies positioned as input to 3GPP specifications defining how 6G networks will handle video delivery later this decade. For video codec stakeholders, the implication is that network intelligence and codec efficiency are converging: as 3GPP standards incorporate AI-native optimization, the effective bandwidth available for video delivery will increase, making the 30% compression gains from AV1 or VVC even more impactful in real-world streaming conditions. The selective data collection approach, which gathers only the specific MDT information relevant to a user flagged for an imminent degradation event rather than bulk-collecting from all devices, mirrors the efficiency-first philosophy driving the codec market's shift away from video patent pool complexity.