Advanced Video Coding (AVC), also known as H.264, is a standard for video compression. It supports a wide array of applications ranging from web streaming and DVD storage to HDTV broadcast and digital cinema production. AVC compression allows high quality video to be transmitted over constrained bandwidth links or stored on media with limited capacity like DVDs. Its capabilities enable new applications and open up new markets.

The Advanced Video Coding (AVC) market is estimated to be valued at US$ 3.46 Bn in 2023 and is expected to exhibit a CAGR of 4.1% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights. 

Market Dynamics:
The increasing demand for high-definition video content across various platforms is estimated to drive the growth of the advanced video coding market during the forecast period. Rising internet traffic and consumption of online video is fueling the need for more efficient video compression standards. According to Cisco, video traffic will account for over 80% of global consumer internet traffic by 2022. Further, growing adoption of Ultra HD and 4K resolution displays is also augmenting the market growth. However, availability of free and open-source video codecs like HEVC may hinder the market growth.

SWOT Analysis

Strength: Advanced Video Coding (AVC) provides high quality video compression at low bitrates. It supports a wide range of applications from mobile phones to televisions. AVC has better video quality and higher resolution compared to older video codecs. AVC is widely supported by all major operating systems and devices. It is an open standard ensuring maximum hardware and software support.

Weakness: AVC requires powerful processors for high-resolution encoding and decoding which increases device costs. The codec is computationally intensive especially for real-time encoding of high definition videos. AVC is slowly being replaced by more efficient next generation codecs like HEVC in newer devices. Older non-hardware accelerated devices struggle with AVC encoding and decoding.

Opportunity: Growth of OTT platforms and video streaming has increased demand for high quality video codecs. AVC is being widely adopted for various video applications across industries like broadcasting, web applications, IPTV etc. Support for higher resolutions up to 8K provides opportunities to deliver enhanced viewing experiences to consumers. Emerging applications in VR/AR also provide new markets for AVC compatible products.

Threats: Newer video codecs like HEVC and VVC provide significantly higher compression with comparable or better video quality at lower bitrates. This poses a major threat to replace AVC in future. Increasing bandwidth availability also reduces the need for highly efficient compression, diminishing the value proposition of AVC. Legislation around royalties and patent licensing may impact commercial adoption of the codec.

Key players: Key players operating in the Advanced Video Coding (AVC) include Apple Inc., Cisco Systems Inc., Google LLC, Microsoft Corporation, Intel Corporation, NVIDIA Corporation, Amazon.com Inc., Sony Corporation, Samsung Electronics Co. Ltd., Huawei Technologies Co. Ltd., Broadcom Inc., Panasonic Corporation, Ericsson AB, ZTE Corporation, Qualcomm Incorporated. Major players are investing in developing platforms and devices to deliver AVC encoded video in higher resolutions and varying applications effectively capitalizing on emerging opportunities.

Key Takeaways

The global Advanced Video Coding (AVC) market size is expected to witness high growth, exhibiting a CAGR of 4.1% over the forecast period, due to increasing demand for high quality video across industries. Growth of video streaming platforms and evolution of newer encoding formats is driving adoption of AVC compatible products.

Regional analysis: North America dominated the global AVC market in 2020 accounting for over 30% share. This was attributed to early adoption of OTT platforms and high definition media in the region. Asia Pacific region is expected to exhibit the highest growth during the forecast period supported by increasing disposable incomes in emerging nations enabling affordability of AVC products. Growing middle class population and evolving media consumption habits are further fueling market growth in Asia Pacific.