My Blog

Home Business What is Transcoding and Why is it Important for VOD Streaming Platform

What is Transcoding and Why is it Important for VOD Streaming Platform

What is Transcoding and Why is it Important for VOD Streaming Platform

By 2026, revenue for Video on Demand is projected to grow to a market volume of 135,673 million USD with a user penetration of 29.2%. This roughly translates to 2298.2 million users. With VOD streaming platform being the next big thing for the foreseeable future, it needs to be able to cater to an ever-growing number of users without loss of quality in audio or video.

Transcoding does just that.

If you are wondering what transcoding is, What is VOD & how it works for VOD platforms, what kind of video or other transcoding settings to use or why Video on Demand transcoding is important, read on!

Transcoding: The What

Very simply, Transcoding is the process of converting a media file (audio or video) from one format to another so that the content can be played on any device without worrying about compatibility issues.

It is different from video encoding though the two terms are used interchangeably in common parlance.

Coming back to transcoding, it is an umbrella term that encompasses 2 other functions too. Transrating is the process of changing bitrates on a video and typically converting it into one or lower bitrate streams. For example, you may take a 16 Mbps bitrate and make it 4mbps so it can fit in less space or it can be broadcast on inferior connections.

Transiting means specifically changing the video frame rate of a video. For example, you might want to alter a 2k or 4k video down to 1080p or 720p. This will again help it stream better on low bandwidth connections.

Transcoding and Video Streaming Platforms: How do they work?

Since what is VOD streaming & which platforms help anyone with access to the internet access their videos, it needs to be optimized to stream over a variety of network speeds and devices. This is where transcoding helps. It is, in simple terms, a two-step process.

The first step involves decoding the original file by decoding it and converting it into an uncompressed file.

The second step is to re-encode this uncompressed file into a specific format that is compatible with a variety of devices.

Different ways of Transcoding

There are mainly 2 ways or methods that can be used to transcode videos.

The first option is to use your own hardware and software to do it. This is called On-Premise transcoding. As the name suggests, this is done in the user’s own physical space, on their own system. While there are a few benefits to this method, namely greater data security, and control, it is a large labor intensive, and time-consuming process. Transcoding is a resource-heavy process that can use up large amounts of processing power. It also needs skilled IT resources. Unless you are a large organization with resources at your disposal, on-premise transcoding can be quite the drain on finances and time.

The other, more convenient option is cloud-based video transcoding. Both cloud video encoding and VOD transcoding can be done online harnessing the power of the cloud. Cloud video transcoding services work as an online video encoder/transcoder which makes the conversion of video files much faster as well as access to a multitude of devices and networks without too much investment. Since the software works by transcoding videos online, it is scalable quickly to meet a surge in demand as well.

Typically used Transcoding settings

While there are a host of different formats available, top VOD platforms which have transcoding services online use the most commonly used formats. These are:

  • Video codec: H.264
  • Audio codec: AAC
  • Video file format: MP4

Also, the resolutions supported by most video transcoding companies are 1080p, 720p, 576p, 480p, 240p.

Transcoding: Why?

Knowing now how complex a process transcoding is, you might be wondering why it is essential for video streaming at all. Some reasons it is essential, especially in the era of on-demand cloud media are:

1)     Helps you reach a wider audience

With content being streamed online, you cannot control the quality of bandwidth or the devices used. Transcoding allows you to ensure no matter the bandwidth or device, the quality of your stream is not impacted.

2)     Ensures the quality of your video is optimized

With fluctuating internet speeds, buffering and video quality are a big problem. Transcoding helps ensure that no matter how many fluctuations, your video quality is optimized for it.

3)     Supports a variety of formats

One of the big advantages of transcoding is you are not restricted to a single format. Having this flexibility allows your content to not be restricted due to its format being unsupported.

4)     Less disruption with Adaptive Bitrate Streaming (ABR)

Transcoding into certain formats like HLS will allow video players to shift to a different video source when there are fluctuations in bandwidth. This helps with fewer interruptions and a better viewing experience.

5)     Requires less bandwidth

One of the main reasons transcoding is a tremendous help is because of its need for less bandwidth for the same content since a single video can be transcoded into multiple formats enabling ABR. This is especially useful for live streaming when upload speeds can vary greatly.

6)     Change transcodes basis where content is streamed

Since transcoding allows multiple resolutions for the same video, it allows streaming to other platforms which might have a different resolution with very little effort. This will only need you to transcode a single stream to a different resolution instead of reducing the resolution for all your streams.

7)     Keeps streaming clean irrespective of encoding quality

In some instances, especially with live streams, the encoded video may not always be of great quality. Transcoding allows you to fix these issues before they stream to devices, ensuring the viewer experience is not impacted.


While Transcoding can be a daunting subject, it is a very essential step in making sure your content reaches its audience and they enjoy watching it by choosing the best online video hosting platforms. Hopefully, our guide has helped answer your questions about what transcoding is and why it is important for your business.


Please enter your comment!
Please enter your name here