Ateme Director Technology and Standards Jan Outters examines how the next generation of video codecs is reshaping the economics and delivery of television, as the industry balances efficiency, device compatibility and audience reach. With the UK exploring a potential shift towards IP delivery, what role will codec strategy play in ensuring a scalable, inclusive and future-ready TV ecosystem?
Codec selection remains a pivotal issue in today’s media distribution landscape. As countries such as the United Kingdom consider switching off DTT, the efficiency of traffic becomes more critical than ever. At the same time, a wrong transition may incur additional costs, fragment audiences or even cut them off entirely. This paper examines the current codec landscape and outlines the strategic considerations that should guide the next phase of evolution.
AVC remains widely deployed, but its decline has accelerated over the past three years as major platforms shift to HEVC, AV1, and other next‑generation codecs. The format has reached the limits of meaningful optimisation, and efficiency studies consistently show that newer codecs deliver 30–50% bitrate savings at equivalent quality.
For services that depend on maximum technical reach, AVC is still unavoidable today, as the only codec supported by virtually all legacy devices. However, with HEVC and AV1 now present in most devices shipped since 2017, AVC is expected to serve only a shrinking minority of receivers by 2030. Maintaining a low‑complexity fallback, such as a 720p25 AVC layer, remains inexpensive. AVC also remains a cost‑efficient redundancy layer for high‑volume streaming. Most AVC patents have already expired in major regions and the last will expire in 2030.
HEVC adoption continues to grow, supported by strong device penetration and UHD‑driven deployments in Spain, Germany, the Netherlands, and Croatia. Most recent smart TVs include native HEVC decoding, and the codec offers high compression efficiency with broad hardware support and allows high density on encoder side. HEVC remains the preferred option for UHD and broadcast, and the migration from AVC will continue adding progressive formats, HDR, and Wide Colour Gamut. HEVC’s mature development permits also MV-HEVC, the stereoscopic immersive standard. The main barrier to wider OTT deployment remains uncertainty around service‑side licensing.
AV1 delivers roughly 15% additional efficiency over HEVC, benefits from a rapidly growing install base, and introduces several advanced features. AV1 was created to address royalty concerns, and the companies behind the Alliance for Open Media have a strong interest in keeping it royalty‑free. AV1 is the first codec with HDR native support and integrates valuable features directly like Film Grain Synthesis (FGS), which can reduce bitrate by up to 70% for grain‑rich content.
AV1 is now supported across all modern Android set‑top boxes and the latest Apple chipsets, with remaining devices covered by the optimised dav1d software decoder. Older devices (particularly those predating 2017) may experience battery drain or decoding limitations and must be rather served with HEVC or AVC. Overall, AV1 could rapidly become the default codec for OTT services, reflected in Netflix’s decision to deliver around 30% of its streams in AV1.
VVC currently offers the highest compression efficiency, delivering 30–40% bitrate savings over HEVC, with some evaluations approaching 50% for specific formats. These gains come with significantly higher encoder complexity – up to five times that of HEVC. Adoption remains limited due to a small installed base. A key milestone will be Brazil’s large‑scale VVC deployment for TV 3.0 in 2026, which may trigger a broader cascade effect in Europe. Many high‑end TV SoCs already include VVC hardware decoding, though it is often disabled at the firmware level. Software decoding is feasible, and China has begun deploying VVC software decoding at scale. Licensing uncertainties mirror those of HEVC, slowing broader adoption despite VVC’s strong technical advantages.
Ateme supports all the codecs discussed above, and our implementations are consistently recognised as best‑in‑class; including by industry leaders such as Netflix, who selected Ateme for live encoding. This encoding performance was also key for delivering our worldwide unique solution delivering live immersive stereoscopic for sports based on MV-HEVC demonstrated on several occasions including at the DTG Summit 2025 and Ascot in January 2025.
Beyond codec performance, with our solutions, services are no longer locked into a static 24/7 set of codec profiles. Our platform enables dynamic adjustment of encoding based on real audience thresholds and actual device capabilities. Codecs can be selectively activated or deactivated at any moment. Redundancy instances can also be leveraged dynamically to introduce more efficient profiles. If an outage occurs, the system can instantly reconfigure itself, falling back to a guaranteed baseline such as AVC to ensure service continuity.
The era of launching a new codec and waiting years to see the benefits is over. Today, it is possible to optimise from day one. Outside of AV1, where strong ecosystem drivers accelerate adoption, codec transitions tend to follow organic device growth. With Ateme’s dynamic approach, operators can finally turn that evolution into immediate and opportunistic operational savings.
Jan will be joining the Future Innovation: Room 101 – Spotting What’s Next in Media, Gaming and Tech session at TV: The Bigger Picture on May 6th. Register now to get your place.
