Next Generation Video Codec in Malaysia Trends and Forecast
The future of the next generation video codec market in Malaysia 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 Malaysia 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 Malaysia
Technological innovations, increasing internet availability, and the escalating demand for superior video content are rapidly transforming the next generation video codec market in Malaysia. As players adopt more effective ways to stream games and consume videos on mobile devices, the demand for efficient video compression technologies is skyrocketing. With Malaysia’s increasing focus on a digital economy and the introduction of 5G networks, the demand for video codecs is changing. These trends are transforming the local market to deliver high-definition content seamlessly across various industries, from entertainment to telecommunications.
• Adoption of HEVC and AV1 for OTT Streaming: The rise in popularity of OTT streaming services like Netflix and other local platforms is contributing to the demand for new high-efficiency video codecs. The OTT market in Malaysia is adopting HEVC (H.265) and AV1 due to their ability to stream 4K and 8K content without severe network bandwidth constraints. These codecs address consumer needs by reducing data usage while preserving video quality. As OTT consumption expands, the use of HEVC and AV1 will be crucial for high-quality, uninterrupted video viewing.
• Mobile Video Streaming via 5G Networks: The demand for mobile video streaming is being driven by the launch of 5G networks in Malaysia. Everything loads considerably faster due to the reduction in latency, allowing users to stream videos in 4K or 8K resolutions on mobile devices. Next-generation video codecs like HEVC and AV1 are emerging as leaders in the mobile video market since they minimize the amount of bandwidth required to stream videos while maintaining quality. This will allow video streaming services to expand their reach in Malaysia and grow the market for mobile video codecs.
• Cloud-Based Video Delivery Services: The use of cloud technologies for video storage and transmission is growing in Malaysia, especially in the entertainment and business sectors. Video codecs that compress data more effectively, like AV1, are critical for preserving high-definition video quality while maximizing storage efficiency. The rise of on-demand videos, virtual events, and business communication portals will require companies to improve their video encoding technologies. Next-generation codecs provide cloud-based video solutions by allowing users to access video content without delays or excessive storage.
• AI Inclusion for Effective Video Compression: Artificial intelligence (AI) is becoming increasingly important for video compression. In Malaysia, AI is being used with next generation codecs to adjust video compression speed based on network capabilities and content complexity. This process enables more data to be delivered at a lower quality and enhanced during use, even under less-than-ideal circumstances. AI-enabled codecs are designed to optimize video streams in real time, leading to more effective video delivery and less buffering. This technological advancement is set to improve video consumption and production for consumers and businesses in Malaysia.
• Assistance of Government on 5G and Far-Reaching Digital Changes: The Malaysian government’s focus on building a 5G backbone system and driving digital transformation creates favorable conditions for the development of the next generation video codec market. Projects like the Malaysia Digital Economy Blueprint (MyDIGITAL) emphasize the growth of digital services, leading to increasing demand for more efficient video streaming and broadcasting technologies. The government’s efforts to fast-track broadband infrastructure and support the delivery of high-quality videos are expected to boost the adoption of next generation video codecs in entertainment, education, business, and other sectors.
New trends in Malaysia’s next generation video codec market are reshaping the video consumption ecosystem. The adoption of HEVC and AV1 codecs, the rollout of 5G networks, and the growth of cloud-based video services are creating opportunities for more efficient video streaming. Moreover, AI’s integration into video compression, along with the government’s digitalization efforts, will give further momentum to the market. These trends will strengthen Malaysia’s position in the international video codec competition, driving innovation and improving video services across multiple industries in the country.
Recent Developments in the Next Generation Video Codec Market in Malaysia
Malaysia’s next generation video codec market is changing rapidly due to innovations in networking technologies, the emergence of new digital channels, and the increasing need for quality video streaming. Cloud adoption, along with Malaysia’s transition to 5G, are major accelerators for the deployment of efficient video codecs. These changes are improving content delivery methods and enhancing video quality while reducing costs for businesses and content providers.
• Advancements in Network Technologies: Malaysia’s ongoing 5G rollout is one of the major catalysts driving the adoption of next generation video codecs. With 5G, video content providers can expand their services to include ultra-high-definition video services on mobile phones. The AV1 codec provides superior compression limits while maintaining high-bitrate images. In tandem with 5G adoption, Malaysia will reach new levels of video streaming quality, especially on mobile and OTT platforms. This will accelerate demand for codecs in the market.
• Proliferation of Domestic OTT Services like Iflix and Tonton: The rapid growth of local OTT platforms, such as Iflix and Tonton, is a key development in Malaysia’s video streaming market. Known for its adoption of HEVC, Malaysian streaming providers are now using the bandwidth-saving AV1 codec for HD content. Providers are compelled to adapt novel codecs to reach a wider audience, especially mobile users. This shift has made Malaysia’s OTT market highly competitive, driving the adoption of newer codecs and impacting content providers as user behavior shifts toward faster OTT consumption.
• Growth of Cloud Video Delivery Services: Cloud video delivery services are expanding in Malaysia, particularly in business and entertainment. This expansion has led to the adoption of more efficient video codecs. As businesses shift toward cloud-based video streaming, conferencing, and content delivery, there is growing demand for next generation codecs that ensure high compression and lower data rates. Services can adopt AV1, for example, to eliminate storage and bandwidth costs while ensuring the transfer of high-quality video. The growth of cloud video services supports the innovation of codecs in Malaysia.
• Collaboration Between Telecom Operators and Content Creators: Collaborations between codec providers and telecom operators have multiplied in Malaysia, driven by growing market needs for high-quality video content. Telecom providers are eager to ship devices that enable effortless video streaming, which has increased the demand for efficient video codecs. Partnerships with OTT providers, cloud service providers, and tech companies are creating devices with next generation video codecs for easier video transactions. These collaborations will continue to enrich the video codec industry in Malaysia, benefiting both customers and businesses.
• Initiatives Towards Digital Transformation Backed by the Government: One of the leading factors contributing to advancements in video codecs is the Malaysian government’s effort to digitally transform the nation. Building digital infrastructure to enhance technology adoption across industries will stimulate demand for next generation video codecs. With further developments in 5G and cloud services, companies in Malaysia will use advanced video codecs to improve video delivery for entertainment and remote work.
Emerging trends in Malaysia’s next generation video codec market are promising, signaling that the nation is advancing toward improving the quality of video streaming. The presence of higher expectations surrounding the use of advanced codecs like HEVC and AV1, the emergence of 5G, and the availability of cloud video services are truly exciting. Moreover, the combination of governmental policies and collaboration between telecom operators and content providers positions Malaysia as a test market for video codec development. These changes will shape the future of video consumption trends in Malaysia for years to come.
Strategic Growth Opportunities for Next Generation Video Codec Market in Malaysia
The next generation video codec market in the video streaming industry is expected to gain traction in Malaysia due to the increasing demand for video and streaming services across various sectors, including entertainment, telecommunications, and business. The constant improvement of network infrastructure, such as the emergence of 5G, combined with the growing popularity of OTT platforms, presents numerous growth opportunities. There is a shift towards codecs that offer better compression, lower bandwidth consumption, and enhanced streaming. As Malaysia invests in digital transformation, key areas are opening up for the implementation of next generation video codec solutions.
• 5G Streaming Video Capabilities: The implementation of 5G networks in Malaysia is building a suitable infrastructure for the application of next generation video codecs, especially in mobile and over-the-top (OTT) streaming. Higher data speeds and lower latency enable users to access high-definition videos on their mobile devices, increasing the need for codecs that enhance video quality while using less data. Using HEVC and AV1 codecs enables the smooth transmission of video content in high-resolution formats, such as 4K and 8K, over mobile networks. The shift towards 5G is expected to positively impact the region’s adoption of video codec technology.
• Video Conferencing and Collaboration over the Cloud: As companies adopt remote working practices, cloud-based video conferencing implementations are growing in Malaysia. AV1 and HEVC video codecs play a critical role in delivering high-quality streams with low bandwidth usage for business meetings, webinars, and virtual events. These codecs enable smooth video conferencing with clear communication at cost-effective enterprise-level bandwidths. With the increased use of cloud platforms for collaboration, the industry is shifting towards the need for next generation codecs, which will drive the growth of the video codec market.
• Over-the-Top (OTT) Streaming Platforms and Content Delivery Networks (CDNs): The expansion of Iflix, Tonton, and other OTT streaming platforms in Malaysia is bringing new opportunities to the economy, especially for new codecs. OTT platforms require robust video codecs that can deliver high-definition video content to all users, regardless of the device they use. AV1 and HEVC are benefiting from the adoption of these codecs because they allow for better compression, improving the quality of videos while reducing data costs. This will contribute to the increasing adoption of these codecs in Malaysia’s emerging digital entertainment market.
• Broadcasting and Media Industry Changes: Malaysia’s media and broadcasting sector is undergoing a transformation towards 4K and 8K content delivery, supported by evolving technologies such as digital content broadcasting (DVB) and broadband internet. The support and development of next generation video codecs with high-efficiency compression are crucial for streaming. AV1 and HEVC video codecs enable broadcasters to deliver high-definition content using existing infrastructure without incurring high bandwidth costs. These next generation codecs will be essential for Malaysia’s media industry to meet demands for improved video delivery, production, and distribution across TV, internet, and mobile devices.
• Teaching and Learning through Organised E-Learning Platforms: In Malaysia, the use of e-learning platforms has seen rapid growth due to COVID-19. As people adjust to digital learning, there is a demand for more robust video streaming services that offer high-quality lectures and educational video materials. With the development of more efficient codecs like HEVC or AV1, providers will be able to deliver smoother streams without long buffering times caused by low bandwidth. The increasing demand for engaging educational videos will drive the adoption of advanced next generation codecs, transforming Malaysia’s education system.
The market opportunities for strategic growth in the next generation video codec market in Malaysia are shaped by the growth of mobile video streaming, cloud services, and the digitalization of industries like broadcasting and education. The integration of newer codecs, like HEVC and AV1, will optimize video delivery, reduce data consumption, and improve the user experience. With rising demand in many industries, these opportunities are poised to stimulate innovation and growth within Malaysia’s video codec market, benefiting both businesses and consumers.
Next Generation Video Codec Market in Malaysia Driver and Challenges
The next generation video codec market in Malaysia faces several technological, economic, and regulatory challenges. The business environment is influenced by technological advancements, the adoption of 5G networks, and the growing consumption of high-definition video content. However, bandwidth limitations, high operational costs, and regulatory challenges related to content distribution and data usage remain key concerns. These drivers and challenges shape the rate at which codec technology is adopted and the operational business environment in the region.
The factors responsible for driving the next generation video codec market in Malaysia include:
• Expansion of 5G Networks: In Malaysia, the deployment of 5G networks is the primary driver behind the advancement of new-generation video codecs. The infrastructure of 5G networks enables faster speeds with lower latency, which is crucial for efficient, high-quality video streaming. HEVC and AV1 video codecs are key for enabling the efficient transmission and reception of ultra-high-definition 4K and 8K streams over 5G networks without incurring high data charges. This technology is accelerating the demand for sophisticated video codecs and bringing them to market faster.
• Increased Supply of OTT Content: The increase in OTT streaming, gaming, and social media has enhanced consumer interest and elevated the quality of content. Next-generation video codecs are essential as the volume of content being produced and delivered to viewers rises. AV1 and HEVC are two of the most powerful codecs in use today. The growing demand for better video experiences, along with the proliferation of video-centric platforms, will continue to foster the adoption of advanced video codecs and grow the Malaysian market.
• Service Provider Cost Efficiency: Next-generation video codecs help service providers save on the costs associated with storing and transmitting videos. As service providers adopt more advanced codecs, they can stream videos of good quality using lower bandwidth, which reduces infrastructure costs. This is especially valuable for OTT and cloud service providers as well as broadcasters. With more players entering the video streaming industry, there will be increased competition, meaning that more cost-effective ways to manage video content will require powerful video codecs to be integrated into Malaysia’s infrastructure.
• Support of Government Towards Digital Economy Initiatives: The next generation video codec market is strongly supported by the Malaysian government’s focus on digital transformation through initiatives like MyDIGITAL. The growth of the digital economy helps the government create an environment that fosters advancements in video technologies, which in turn strengthens the economy. The government’s support for video infrastructure, including 5G and OTT, contributes to the development of an environment that demands advanced video codecs. Government-backed initiatives will continue to play an important role in the expansion of the codec market.
• Progress in Artificial Intelligence and Video Compression: The adoption of Artificial Intelligence (AI) is crucial as it greatly improves the algorithms used for video compression, which is a key factor in the investment in next generation video codecs. AI optimizes video streams based on network conditions and user preferences, thereby improving the quality of service. As AI-powered video codecs become more sophisticated, there will be further advancements in video compression and delivery, making AI an integral part of Malaysia’s changing video streaming and broadcasting industries.
Challenges in the next generation video codec market in Malaysia are:
• High Operating and Licensing Costs: Compared to other countries, Malaysia faces some of the highest operational and licensing costs for next generation video codecs, making advanced video codecs difficult to access. Many leading codecs, such as HEVC, come with licensing fees that add to the already strained resources of service providers and content distributors. These expenses create a barrier for smaller companies and startups that wish to enter the competitive video streaming market, limiting the adoption of new-generation codecs in Malaysia.
• Low Bandwidth Allocation in Rural Areas: While the 5G rollout continues to progress in metropolitan cities, bandwidth constraints remain in rural areas of Malaysia. For modern video encoders and decoders, or codecs, to be useful, they must perform well in varying network conditions. Technologies like AV1 and HEVC focus on efficient bandwidth usage. However, the gap between urban and rural areas can restrict the performance of these codecs. Closing this gap is essential for providing equal access to high-quality video content across Malaysia.
• Restrictions in Distribution of Content and Information: Regulatory constraints surrounding content dissemination and data consumption can hinder Malaysia’s adoption of next generation video codecs. Issues such as copyright infringement, the protection of sensitive information, and government control over streaming sites can slow the widespread use of codecs. These challenges must be addressed as the government strengthens its digital policies to foster a healthier environment for codec utilization and the advancement of the video streaming industry.
The reasons and obstacles affecting the next generation video codec industry in Malaysia highlight the complexity of the market. Major growth drivers include the advent of 5G technology, increased demand for superior content, and government support for digital transformation efforts. However, high operational expenses, bandwidth restrictions, and regulatory challenges remain significant obstacles. Continued innovation is expected to address these issues and take advantage of growth opportunities in the Malaysian market. How these factors are managed will determine the pace of codec implementation. Malaysia is progressing in innovation, but how these factors are controlled will truly define the rate of technological advancement.
List of Next Generation Video Codec Market in Malaysia 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 Malaysia by Segment
The study includes a forecast for the next generation video codec market in Malaysia by video codecs type and application.
Next Generation Video Codec Market in Malaysia by Video Codecs Type [Analysis by Value from 2019 to 2031]:
• AVC
• AV1
• HEVC
• VP9
• VVC
Next Generation Video Codec Market in Malaysia by Application [Analysis by Value from 2019 to 2031]:
• Mobile Phone
• Computer
• TV
• Others
Features of the Next Generation Video Codec Market in Malaysia
Market Size Estimates: Next generation video codec in Malaysia 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 Malaysia 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 Malaysia.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the next generation video codec in Malaysia.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
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FAQ
Q1. What are the major drivers influencing the growth of the next generation video codec market in Malaysia?
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 Malaysia?
Answer: The future of the next generation video codec market in Malaysia looks promising with opportunities in the mobile phone, computer, and TV markets.
Q3. Which next generation video codec market segment in Malaysia 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 Malaysia 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?
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