Google, Meta, Vodafone Push Phone Makers on Video Codecs to Cut Costs

Tech and telecom giants urge smartphone makers to build in efficient video codecs, aiming to slash massive bandwidth costs.

In a move that could change how video streams to your phone, Google, Meta, and Vodafone are jointly pressuring smartphone manufacturers to build more efficient video codecs directly into their devices' hardware. This is not just about better picture quality; it is a massive financial play. These companies are facing staggering bandwidth costs as video consumption skyrockets, and they are betting that new compression technologies like AV1 can slash their infrastructure bills by up to 30%. A Vodafone executive put it bluntly: "When high-definition video accounts for over 70% of mobile network traffic, even small efficiency gains translate to hundreds of millions in annual savings across our global operations."

The technical ask is pretty specific. The coalition wants chipmakers like Qualcomm and MediaTek to integrate dedicated AV1 decoding blocks into their system-on-chip designs, which would allow phones to play high-quality video using significantly less data. AV1 is an open-source codec that can reduce video bitrates by about 30% compared to the current H.265 standard without sacrificing quality. But without hardware support, decoding AV1 streams drains phone batteries too quickly. The push also includes the newer VVC (Versatile Video Coding) standard, which promises another 50% improvement in efficiency, but requires even more sophisticated hardware acceleration to be practical for mobile devices.

For startups and startups, this industry tug-of-war creates some interesting opportunities. Hardware companies that can design more efficient video processing IP blocks are suddenly in high demand. Meanwhile, software startups are finding openings in adaptive bitrate technologies that can intelligently switch between codecs based on network conditions. As the founder of a video infrastructure startup noted, "This is not just about compression; it is about building the entire stack that manages video delivery in a multi-codec world." The situation also highlights how industry standards battles can create openings for nimble companies to provide translation layers and compatibility solutions while the giants fight over the next dominant standard. For investors, it signals that video optimization technologies remain a hot area, especially those that can demonstrate real reductions in bandwidth consumption for large-scale streaming services.