The quiet codec: How video compression is powering India’s OTT boom

In the last decade, the digital entertainment landscape has undergone a seismic transformation. The emergence of Over-the-Top (OTT) platforms such as Netflix, Amazon Prime Video, Jio Hotstar, and local giants like JioCinema and MX Player has revolutionised how audiences consume content. But behind the glitz of premium series, blockbuster premieres, and binge-worthy originals lies a less glamorous, yet vital enabler: video compression technology.

Without efficient video compression standards, the OTT boom would have been unsustainable. From MPEG-2 in the early broadcast era to adaptive streaming powered by Artificial Intelligence (AI), compression technologies have drastically reduced the bandwidth needed to transmit high-quality video. In a country like India, characterised by mobile-first Internet usage, patchy connectivity, and price-sensitive consumers, compression is not just an engineering marvel; it is a business imperative.

Evolution of Codecs: From MPEG-2 to AV1

The journey of video compression mirrors the evolution of digital infrastructure. In the mid-1990s, MPEG-2 emerged as the workhorse for digital TV broadcasts and DVD distribution. While effective for its time, MPEG-2 required high bitrates, often exceeding 3 Mbps for standard-definition content, which was unsustainable in the early days of the Internet.

The 2000s saw the advent of H.264 (AVC), a landmark codec that offered far better compression without significant quality trade-offs. H.264 enabled the growth of early video platforms, such as YouTube, and paved the way for the mainstream adoption of online streaming. Its success was amplified by broad hardware support across devices and a flexible licensing structure that appealed to commercial users.

As 4K and HDR content entered the scene, H.265 (HEVC) stepped in with up to 50% improved efficiency. But its fragmented and costly licensing models deterred many players from adopting it at scale. This created space for Google’s VP9—a royalty-free codec optimised for Internet delivery. By 2016, YouTube was delivering billions of streams via VP9, enabling higher-quality video without increasing data costs.

In response to the need for an industry-wide open standard, tech giants including Google, Amazon, Netflix, Microsoft, Intel, and Meta formed the Alliance for Open Media and launched AV1. This codec offers approximately 30% better compression efficiency than HEVC while remaining royalty-free. By 2024, AV1 had gained significant traction among platforms serving mobile-first and bandwidth-sensitive markets.

Each generation of codecs has not only improved video quality at lower bitrates but also reduced costs for content delivery networks (CDNs), optimised latency, and enhanced user experience. These gains are especially significant in rural and emerging regions, where stable high-speed connectivity is still a work in progress.

Versatile Video Coding (VVC), also known as H.266, the latest entrant, promises even greater savings—up to 50% over HEVC. It is designed to support future formats, such as 8K, 360-degree video, and virtual reality. However, with its heavy compute requirements and intricate royalty regime, VVC faces adoption hurdles similar to those of HEVC. Its fate may depend on whether hardware manufacturers and software ecosystems widely adopt it.

India’s OTT platforms are watching the global codec race with interest. With over 25 platforms offering regional and niche content, balancing performance and licensing costs is crucial to ensure universal device compatibility. In 2025, with AI-augmented codecs beginning to emerge and global streaming demand surging, video compression is no longer a supporting player—it is centre stage.

Why Compression is Business-Critical?

Video compression now sits at the core of platform economics, content reach, and customer experience.

Lower bitrates, higher engagement: In markets like India and Southeast Asia, over 70% of OTT users rely on prepaid mobile data. Efficient compression enables longer viewing sessions without data anxiety. A 2024 Ericsson study showed that platforms using AV1 saw 23% longer session durations compared to those still using H.264.

Efficient codecs also reduce the likelihood of app uninstalls. Viewers who experience repeated buffering or data exhaustion are far more likely to abandon a platform, especially in Tier 2 and Tier 3 towns.

Reduced delivery costs at scale: Video accounts for more than 82% of global Internet traffic, according to a 2024 report by Cisco. CDNs and ISPs bill platforms based on the volume of data delivered. With AV1 and early VVC adoption, platforms have trimmed bandwidth consumption by up to 40%, saving millions annually.

For newer platforms competing with global giants, this cost efficiency is the difference between survival and scale. Compression drives lower per-stream delivery costs, improving unit economics for both Subscription Video on Demand (SVOD) and Advertising-based Video on Demand (AVOD) business models.

Scalability across networks and devices: OTT players must serve content seamlessly across a fragmented device landscape—smart TVs, tablets, feature phones, 5G connections, and congested 3G zones. Compression ensures that a 1080p video stream can adapt and perform equally well on high-end televisions and basic Android handsets in tier-3 cities.

Telcos also benefit from reduced video bitrate, which means less strain on mobile networks during peak hours, leading to improved quality of service for all users.

The real-world trade-offs: Powerful codecs demand powerful processing. Live sports streaming and interactive video formats require real-time encoding—a challenge for compute-heavy codecs like AV1 and VVC. Entry-level devices also lack hardware decoders, causing playback issues. A 2025 Google benchmark revealed that AV1 encoding takes 2.5 times longer than H.264, although AI-powered encoders are beginning to bridge that gap.

Compression is no longer just about efficiency. It is a strategic tool to maximise reach, reduce churn, and maintain competitiveness in a saturated OTT ecosystem.

Tech in Action: From Encoding to Streaming

Behind every high-quality stream is a sophisticated backend pipeline. According to the Bitmovin Video Developer Report 2025, encoding is the initial phase, where raw footage is compressed using codecs such as H.264, VP9, AV1, or VVC. AV1, now supported by over 65% of major platforms, delivers bitrate savings of 30–40% over HEVC.

Transcoding transforms these encoded masters into multiple formats and resolutions to support playback across devices and network conditions. For live events, these workflows must run in parallel with minimal latency.

Adaptive Bitrate Streaming (ABR) is key to maintaining Quality of Experience. ABR splits videos into short chunks, each encoded at various bitrates. The video player switches between these chunks based on real-time bandwidth, ensuring seamless playback. The result is zero buffering and uninterrupted playback, even in low-bandwidth areas such as rural Uttar Pradesh or interior Africa. A 2024 Akamai report found that ABR implementation reduced viewer abandonment by an average of 37%.

Edge caching further reduces delivery latency by storing frequently accessed content closer to end users. Together, these components form the invisible scaffolding of modern streaming infrastructure.

AI and ML: The New Compression Frontier

In 2025, AI and machine learning are no longer optional in video compression—they are the competitive edge. AI models now analyse scene complexity frame by frame, assigning bitrate dynamically based on motion, detail, and content type. This technique, pioneered by Netflix’s “per-title encoding”, has evolved into per-scene and per-scene encoding using neural networks.

AI upscaling tools, such as NVIDIA’s DLSS and YouTube’s deep learning filters, simulate high-definition (HD) output from standard-definition (SD) streams, thereby cutting delivery costs while preserving quality. Similarly, predictive caching algorithms pre-load popular or trending content during off-peak hours, reducing congestion during peak times.

Newer platforms are also using AI to forecast genre popularity by region and pre-render trailers or highlights with optimised bitrates before user engagement spikes. According to Conviva’s 2025 report, platforms using AI-enhanced compression witnessed 22% better startup times, 30% fewer buffering incidents, and 15% lower CDN expenses.

India’s Story: Data, Devices, and Rural Reach

India’s OTT revolution unfolds in a landscape unlike any other — vast, mobile-first, and defined by both promise and paradox. Here, the true power of video compression is not just technical; it is transformational.

A nation on the small screen: Reports, including that of TRAI (2024), indicate that as of early 2025, over 95% of India’s 850+ million Internet users access OTT content via smartphones. These are not high-end, unlimited-data users—most rely on daily or weekly prepaid data packs, where every megabyte matters. Efficient compression is what turns a one-minute video into a ten-minute story without breaking the user’s data bank.

A patchwork of networks: India’s digital fabric stretches from 5G-enabled metros to remote villages still reliant on patchy 3G. This diversity makes ABR and low-bitrate codecs like AV1 and VP9 not just important, but essential. Platforms must cater equally to fibre-rich Gurgaon and a tribal hamlet in Jharkhand, with the same video, gracefully adapting to wildly different pipes.

Jio’s data revolution: The arrival of Reliance Jio in 2016 slashed mobile data costs by over 90%, igniting India’s video boom. But cheap data also led to congested networks. It was compression that saved the day, enabling platforms to deliver high-quality video even during peak traffic, without compromising user experience. By 2025, India is expected to see over 13 billion video views per day, much of it made possible through smart encoding and edge caching.

Reaching the heartland: Today, platforms like MX Player, YouTube, and Chingari dominate rural screens not just through content, but through smart engineering. Their ultra-lightweight apps, paired with adaptive streaming and aggressive compression, have made them household names in tier-2 and tier-3 towns. Even public sector efforts, such as DD Free Dish’s upcoming hybrid OTT model, depend heavily on efficient codecs to reach the true “Bharat.”

In a country where one MB can mean one minute of school, news, or escape, compression is more than just saving bandwidth. It is about bridging the digital divide, unlocking entertainment, education, and empowerment—one compressed frame at a time.

Infrastructure Powering India’s Streaming Boom

Good video compression is essential, but without a robust infrastructure, it is not enough. Streaming platforms require intelligent delivery systems to reach millions of users quickly and reliably. CDNs play a critical role by caching copies of videos closer to end-users, reducing latency and buffering.

With better compression, the data flowing through these networks is lighter, which reduces delivery costs and enhances streaming speeds. According to the EY India Report 2025, over 70% of Indian OTT traffic is now delivered through CDNs such as Akamai, AWS CloudFront, and private networks.

Edge caching has also emerged as a key innovation. Telecom operators like Jio and Airtel are storing high-demand content at the edge of their networks—on servers located at mobile towers. This significantly shortens the distance data must travel, enabling faster video delivery during peak hours. To further optimise performance, telcos are building private CDNs. For instance, Jio’s proprietary CDN powers JioCinema and JioTV, delivering content directly from its servers to users, thereby conserving network resources and improving the viewer experience.

Another major shift is the growing convergence between OTT platforms and telecom service providers. Telcos are no longer just connectivity providers—they now bundle OTT subscriptions such as Netflix, Jio Hotstar, and Amazon Prime Video with their mobile data plans. As telcos deepen their role in content delivery, the need for integrated compression and distribution technologies becomes more critical to maintain low costs and high user satisfaction.

AI Compression and the Promise of the 6G Era

Looking ahead, AI is poised to redefine video compression. Research by Meta indicates that neural codecs can improve efficiency by 20–30% compared to today’s leading standards. These AI-powered algorithms could soon enable real-time compression that adapts dynamically to scene complexity, particularly during live broadcasts.

Simultaneously, the advent of 6G—anticipated by the early 2030s—will usher in ultra-fast speeds and near-zero latency. Coupled with satellite services like BharatNet and Starlink, this evolution will extend high-quality streaming to rural and remote regions. However, even with these advances, efficient compression will remain essential to keep data costs manageable and services accessible to all.

While headlines often focus on record-breaking viewership, blockbuster licensing deals, and surging subscriber counts, it is the quiet progress in video compression that forms the backbone of the streaming ecosystem.

India’s OTT future—shaped by its linguistic diversity, rural aspirations, and boundless demand for digital content—will depend largely on how intelligently we compress our stories. As cutting-edge technologies like VVC and AI-driven algorithms gain ground, and 6G becomes a reality, the next phase of video innovation will not only be judged by what appears on screen, but by how efficiently it was delivered behind the scenes.