An anonymous reader shares a report: For the last 10 years, H.264/AVC has been the dominant video codec used for streaming but with Apple adopting H.265/HEVC in iOS 11 and Google heavily supporting VP9 in Android, a change is on the horizon. Next year the Alliance for Open Media will release their AV1 codec which will again improve video compression efficiency even further. But 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. As a result of what's take place in the codec market, and with better quality video being demanded by consumers, content owners, broadcasters and OTT providers are starting to see a massive increase in encoding costs. New codecs like H.265 and VP9 need 5x the servers costs because of their complexity. Currently, AV1 needs over 20x the server costs. The mix of SD, HD and UHD continues to move to better quality: e.g. HDR, 10-bit and higher frame rates. Server encoding cost to move from 1080p SDR to 4K HDR is 5x. 360 and Facebook's 6DoF video are also growing in consumption by consumers which again increases encoding costs by at least 4x. 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.