Video Codec History: H.261 to AV2 and the 2026 State of Streaming Compression

The history of video codecs spans four decades of iterative improvement on one core principle: predict what the next frame will look like, store only the difference from that prediction, and compress the residual. ## The Lineage **H.261** (1988): The first practical digital video codec, designed for videoconferencing over ISDN lines. Introduced the fundamental concepts: divide frames into blocks, predict motion between frames, encode only the residual difference. **MPEG-1** (1993): Brought video to CD-ROMs. Defined the I-frame (complete image), P-frame (predicted from previous), B-frame (predicted from both previous and next) structure still used today. **MPEG-2 / H.262** (1995): The DVD and broadcast television codec. Higher quality, interlaced video support, scalable bitrates. Still used in over-the-air TV broadcasting. **MPEG-4 Part 2 / DivX / Xvid** (late 1990s-2000s): The internet piracy era codec. DivX (proprietary) and Xvid (open-source) enabled movie files small enough to share on early broadband. Not a major technical leap but a cultural inflection point. **H.264 / AVC** (2003): The codec that enabled YouTube, streaming video, and modern video calling. Roughly 50% more efficient than MPEG-2. Became the universal standard — virtually every device on earth can decode H.264. Still dominant by install base. **H.265 / HEVC and VP9** (2013): Approximately 50% more efficient than H.264. H.265 was crippled by a patent licensing disaster (multiple competing patent pools with unclear terms). VP9, Google's royalty-free alternative, became YouTube's primary codec. The licensing mess around H.265 directly motivated the creation of AV1. **AV1** (2018): Created by the Alliance for Open Media (Google, Mozilla, Netflix, Amazon, Meta, and others) as a royalty-free alternative. Approximately 30% more efficient than H.265/VP9. As of 2026, AV1 has quietly won the web: YouTube uses it for 75%+ of streams, Netflix uses it for 30% of all streams and 85% of its HDR catalog. **H.266 / VVC** (2020): The ITU's successor to H.265. Technically excellent (~40% better than H.265) but the licensing mess was never resolved. Effectively dead on arrival for web streaming — no major platform has adopted it. **AV2** (draft spec February 2026): The Alliance for Open Media's successor to AV1, targeting approximately 40% bandwidth reduction over AV1. Full specification expected late 2026. Royalty-free like its predecessor. ## The Pattern Each generation achieves roughly 30-50% compression improvement over its predecessor at equivalent quality. The computational cost of encoding increases with each generation (AV1 encoding is ~10x slower than H.264), but decoding remains efficient through hardware support. The trend: royalty-free codecs (VP9 → AV1 → AV2) are winning over patent-encumbered standards (H.265 → H.266) because the licensing uncertainty deters adoption.