Apple’s adoption of H.265/HEVC will drive up encoding costs, analyst says

While Apple’s adoption of the H.265/HEVC video codec for iOS 11 is largely seen as a positive that will drive down video file sizes and streaming bitrates while maintaining image quality, the decision will also fragment the codec market and drive up encoding costs.

That’s the argument put forth by Frost & Sullivan analyst Dan Rayburn, who cites the simultaneous presence of Android codec VP9 as well as the pending release of the Alliance for Open Media’s AV1 codec.

“The end result is that the codec market is about to get very fragmented, with content owners soon having to decide if they need to support three codecs (H.264, H.265 and VP9) instead of just H.264 and with AV1 expected to be released in 2019,” Rayburn said on his Streaming Media blog.

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With new codecs like H.265 and VP9 requiring five times the service costs because of their complexity, Rayburn added, “broadcasters and OTT providers are starting to see a massive increase in encoding costs." AV1, he also pointed out, will yield a 20x increase in server cost. And that’s just the beginning.

“If you add up all these variables, it’s not hard to do the math and see that for some, encoding costs could increase by 500x over the next few years as new codecs, higher quality video, 360 video and general demand increases,” Rayburn said. 

This increase in required computer horsepower will be mitigated, he added, by field-programmable gate array (FPGA) technology in public clouds. 

Also, Rayburn points out that encoding software such as x265 includes presets that allow users to “trade off” computing requirements relative to the size of the video being encoded. 

“x265 can produce very high-quality results with the 'veryslow' preset,” Rayburn explained.