Hardware vs Software Encoders: Which One is Best for Streaming?

The video you capture firsthand is unstreamable. You might succeed in storing it somewhere, but there's nearly no way you can stream it anywhere.

That's because the raw video file is too heavy.

To save the day, an encoder takes your heavy video and shrinks it to a smaller size so you can stream it.

And this process can either happen on software or hardware encoders.

But which one is better?

In this article, we'll explain and compare both hardware and software encoders so you can pick the best for your streaming setup.

What Is Video Encoding?

Video encoding is the process of converting raw video footage into a compressed digital format so it can be stored, streamed, or shared efficiently.

Because raw video files are very large, encoding uses codecs (compression methods) to reduce file size while preserving as much quality as possible.

Want to learn more about encoding? Explore this article.

There are two main types of encoding: software encoding and hardware encoding.

• Software encoding: Uses your computer's CPU, offering more control and often better quality.
• Hardware encoding: Uses dedicated components like GPUs for faster performance with less strain on the system.

We'll start with hardware encoding.

What Is a Hardware Encoder?

A hardware encoder is a specialized device that quickly and efficiently compresses video or audio into a compatible format for storage or transmission.

Unlike software encoders, it does not rely on the computer's processing power (CPU). Instead, hardware encoders use specialized chips or processors designed for encoding.

Examples:

Video Capture Cards -> Devices like Elgato and AverMedia capture cards, which include hardware encoders for live streaming.

Cameras -> Professional cameras (e. g., Sony PXW-Z150), like those used in broadcasting, often have built-in hardware encoders to compress video for live streaming.

Hardware encoders are best for:

• Speed and efficiency: Hardware encoders are optimized for fast, real-time encoding - ideal for live streaming or high-demand video processing.
• Low CPU usage: Since the task is handled by the hardware, the computer's CPU isn't overburdened with encoding tasks, freeing it up for other operations.
• Reliability: Hardware encoders are built for consistency and stability. These are more reliable for live broadcasts or professional video production.

How Hardware Encoders Work

To compress and convert video files, hardware encoders use dedicated hardware components: GPUs (Graphics Processing Units), specialized ASICs (Application-Specific Integrated Circuits), or video encoding chips.

Here is the process:

Step 1. Video Capture: The encoder receives raw video from a camera or other video input device.

Step 2. Compression: The hardware encoder (using specialized chips like GPUs or ASICs) compresses the video into a smaller file, typically using formats like H.264 or HEVC.

Step 3. Real-time Processing: Compression happens in real-time, ensuring quick encoding without delaying the video feed.

Step 4. Output: The compressed video is then immediately streamed or stored, ready for transmission to platforms like YouTube or a media server.

Hardware Encoding

Pros	Cons
Faster Processing: Quick file processing compared to software.	Lower Quality at Same Bitrate: May not match software encoding quality.
Minimal System Impact: Offloads encoding from the CPU.	Hardware Requirements: Needs compatible hardware, which can be expensive.
Ideal for Streaming & Broadcasting: Perfect for live events/gaming.
Lower Power Usage: Consumes less power than CPU-based encoding.
NOTE: Hardware encoders excel in speed and efficiency but may sacrifice customization and video quality.

What Is a Software Encoder?

A software encoder is a program that converts raw video or audio into a compressed digital format using your device's CPU (processor) instead of dedicated hardware.

Unlike hardware encoding, which relies on GPUs or specialized chips, software encoding uses advanced compression algorithms like x264 (H.264), x265 (HEVC), and AV1. This way, software encoders can offer more customization and quality control.

Examples:

X264 -> A popular open-source software encoder for H.264 video compression. Commonly used in streaming and recording applications like OBS Studio.

FFmpeg -> A powerful multimedia framework that includes software encoders for various formats, including H.264 and HEVC. It's widely used for video conversion, editing, and streaming.

How Software Encoding Works

Here's the process software encoders follow:

Step 1. Video Data Processing: The device's CPU processes the raw video, and compression happens.

Step 2. Bitrate Adjustment: The encoder adjusts the bitrate to balance video quality and streaming efficiency.

Step 3. Customization: At this stage, users can customize resolution, frame rate, and compression level.

Step 4. Multi-pass Encoding: The video undergoes multi-pass encoding, where it is analyzed multiple times to optimize both quality and compression efficiency.

Step 5. Final Compression: The encoded video is compressed into the desired format for storage or streaming. It maintains the best balance between size and quality.

Software Encoding

Pros	Cons
Higher Video Quality: Better quality at the same bitrate, with smaller file sizes.	Higher CPU Usage: Requires significant CPU power, affecting other tasks.
Greater Customization: Allows adjustments to resolution, frame rates, and compression.	Slower Processing: Less efficient for real-time tasks.
No Specialized Hardware Needed: Can run on most computers.	Requires a Powerful CPU: Needs a multi-core processor with high clock speeds.
Ideal for Pre-recorded Content: Best when quality is prioritized over speed.	Not Ideal for Live Streaming: Increases latency and system load.

NOTE: Software encoding is best for on-demand content, where it prioritizes quality and customization over speed.

Hardware vs Software Encoders: Final Comparison

Here's a comparison table to show you the key differences between hardware and software encoders.

Feature	Hardware Encoding	Software Encoding
Processing Unit	Dedicated GPU/ASIC (e.g., NVENC, Quick Sync)	CPU-based (x264, x265)
Speed	Faster, real-time processing	Slower, higher latency
Quality	Good, but lower compression efficiency	Higher quality at lower bitrates
CPU Usage	Low, frees up system resources	High, can slow down other tasks
Customization	Limited control over settings	Extensive control and fine-tuning
Power Consumption	Lower, optimized for efficiency	Higher, consumes more energy
Best Use Case	Live streaming, gaming	High-quality recordings, on-demand content
Limitations	Requires compatible hardware	CPU-intensive, slower processing

Encoding in OTT and Live Streaming

To deliver high-quality streaming, you must choose the right encoding solution.

Here, your choice should be based on technical features (e.g., real-time performance, compression efficiency, and compatibility across different networks and devices). Here are a few things you can consider:

1. CDN Compatibility

Better Supported by: Hardware Encoding

Is your encoding solution compatible with a CDN (Content Delivery Network)? It's important if you want to distribute your content globally.

If that's your goal, consider hardware encoding solutions like NVENC and Quick Sync. These are already optimized for CDN integration to improve bandwidth efficiency and the streaming experience.

2. ABR Support

Software Encoding -> for customization, Hardware Encoding -> for real-time performance

Both hardware and software encoding solutions support ABR (adaptive bitrate streaming). But software encoding offers more customization and multi-pass encoding for optimized quality.

On the other hand, hardware encoding ensures real-time performance but with fewer customization options. Choose based on your priority.

3. Latency Management

Better Supported by: Hardware Encoding

Hardware encoding is the better choice for interactive events, live sports, or gaming streams.

It delivers low-latency streaming, ensuring your content is processed, compressed, and streamed with minimal delay for faster delivery.

However, if you're distributing on-demand content, software encoding may be sufficient, despite its higher latency.

P.S.

If you're looking for OTT solutions, inoRain can provide you with the perfect solution, no worries about encoding or any other streaming capabilities.

From adaptive bitrate streaming to DRM integration and an OTT CMS, we give you every necessary tool to deliver high-quality streaming experiences on your own white-label OTT platform.

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