The Video Encoders Market is estimated to reach USD 3.3 billion by 2027 from USD 2.3 billion in 2022 with a CAGR of 7.6% from 2022 to 2027. A video encoder is an electronic device that transforms an analog video broadcast system into a digital or IP system so that it can be streamed over a network. Technological advancements have revolutionized the telecommunication industry, and the demand for innovative and efficient technologies is growing rapidly.
The market’s growth can be attributed majorly to the adoption of high-efficiency video coding standards for video encoding, ease of connecting analog cameras using video encoder to a network, and the use of cloud services to store a large amount of data. Video encoders can be efficiently used to migrate an existing analog-based system to an IP-based system. Thus, manufacturers in the market invest heavily in research & development (R&D) activities to constantly innovate and improve the efficacy of video encoders. Increase in digitization and video content delivery network (CDN) among diverse businesses are also creating immense opportunities for the video encoder market. The video encoder industry has been segmented based on the number of channels, type, application, and region.
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DRIVERS: Use of cloud services to store increasing amounts of data
The increasing population density in urban areas and demand for high-quality processing in video applications are pushing broadcast and communication networks to the limits of their bandwidth and performance capacities. Adding more equipment to handle these video streams is economically challenging. As a result, operators, service providers, and content providers are looking to cloud services for data storage. The adoption of cloud services reduces business costs and makes applications accessible from any location. While interoperability and data security issues may harm data, the future of cloud services seems promising for IT giants such as IBM (US), Google (US), Microsoft (US), and Salesforce.com (US). These companies are actively developing new solutions to address existing issues. The increasing adoption of cloud services is expected to increase the deployment of video encoders to deliver encoded videos to the desired platforms.
CHALLENGES: Capital expenditures due to transition of technology
The latest video compression technology, HEVC or H.265, provides more efficiency than previous standards such as MPEG-4 and MPEG-2. Although changing video codecs provide uncertainty in patent licensing terms, bandwidth advantages, , and implementation costs are creating challenges for the market. The increasing cost might affect the overall profitability of end users. Broadcasters might face problems while switching from one video codec to another. For instance, while changing from MPEG-2 to MPEG-4, they must change or upgrade equipment to support MPEG-4 at a significant cost.
Video Encoders Market in North America Expected to Hold Largest Market Share Throughout Forecast Period
The market in RoW is expected to grow at the highest CAGR during the forecast period. The adoption of security cameras is increasing to enhance safety in these regions. Globalization has increased the demand for high-quality security services but with limited investments. Thus, using video encoders for the existing analog systems is proving economical and creating several growth opportunities for the video encoder market in RoW. However, in 2022, North America is estimated to be the largest market for video encoders. Major drivers for the video encoder market in this region are collaborations between the government and network arenas, institutional partnerships between video encoder manufacturers and research collaborations, and large-scale investments in cloud-based services. The large economy, strong high-tech and media sector, strong connectivity, and highly educated population are some of the other factors driving the video encoder market in North America.
Major companies operating in the video encoders market include Hikvision (China), VITEC (France), Harmonic (US), Motorola Solutions (US), and CISCO (US).
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