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Next-gen codecs set to disrupt transcoding for the next 10 years

And given, according to the Media & Entertainment Transcoding Workload and Device Royalty Forecast 2020-2030, such next-generation codecs are set to be more costly, the total addressable market (TAM) for video device royalties is projected to grow 146% annually to $8.42 billion from 2020 to 2030. By contrast, the likely service obtainable market (SOM) is forecast to grow to $7.62 billion in 2030. This means said the analyst that patent pools will be collecting ever more royalties from the available market, with the total SOM reaching over 90% of the TAM by the end of the period.

Rethink added that what it called the “ballooning” size of device royalty payments is also exemplified by the flat rate of annual video device sales, which are going to slowly taper down to 2.61 billion in 2030. It predicts that the growing demand for smartphones and smart TVs will be offset by a flat market for games consoles, and shrinking demand for CTV devices, computers, tablets, set tops and non-smart televisions.

Yet the study cautions that despite the hype surrounding the capabilities of new technologies, the rise of codecs is directly linked to adoption by OEMS, which in turn is led by consumer demand for device capabilities. This means it said that the rise of the next generation is going to be much slower than some would have you believe, with any seismic changes to the status quo not occurring until the latter half of this decade.

While there are some unknowns concerning royalty costs Rethink emphasised that it was certain to see increasingly fragmented use of codecs across consumer video devices. It observed that not only were there two distinct camps of codec ‘families’ – those descended from the MPEG lineage, and those spearheaded by AOMedia – but within each family there were multiple codecs competing for implementation by OEMs.

Ultimately, predicted the Media & Entertainment Transcoding Workload and Device Royalty Forecast 2020-2030, the MPEG family will cede ground to the codecs found in the AOMedia ecosystem. Rapid TV News

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