What is Transcoding? A Guide for OTT Streaming

Growing a successful OTT streaming business means continuously improving video quality, performance, and compatibility. Doing this will expose you to a broader audience, increase your revenue, and help your OTT business bloom!

One key innovation that ensures flawless streaming across devices is transcoding.

This guide has everything you need to know about transcoding and its refining effects on your OTT business. Read on to see what transcoding can do to help you succeed.

Key Takeaways

• Transcoding is the process of decoding, modifying, and re-encoding digital media for distribution.
• Encoding and transcoding are two different processes, but transcoding is incomplete without encoding.
• With transcoding, your audience can enjoy high-quality streaming that keeps them engaged and meets their expectations.

Understanding Transcoding

Media, audio, or video transcoding refers to converting digital data from one format to another by decoding digital content, modifying it, and then re-encoding it for distribution.

So, transcoding makes media files adaptable for various platforms.

Without transcoding, videos may not play correctly on all devices due to format restrictions.

The main goal of transcoding is to make content accessible to a wider audience by adjusting the format, bitrate, and resolution.

A single format or resolution may only work on certain devices, limiting your accessibility. Transcoding solves this problem by optimizing content for device compatibility.

Transcoding vs. Encoding

People often confuse transcoding with encoding. It is important to note that these are two different processes.

Video or media encoding converts raw digital media into a compressed format using a codec, making it smaller and easier to store, stream, or play.

Transcoding converts digital media from one format to another by decoding, modifying, and re-encoding it.

For a precise comparison, see the table below:

Transcoding	Encoding
Converts media from one format to another by decoding, modifying, and re-encoding.	Compresses raw media into a specific digital format using a codec.
Ensures compatibility, quality adjustment, or compression optimization.	Reduces file size and prepares media for storage, streaming, or distribution.
Works with already-encoded media (compressed or formatted).	Processes raw media (uncompressed video/audio).
Outputs another encoded format (same or different codec, bitrate, or resolution).	Outputs compressed digital media in a specific format.
Example: Converting H.264 video to H.265 for better compression.	Example: Encoding a raw video into H.264 for streaming.
More computationally intensive (decoding + re-encoding).	Less complex (direct compression).

How Transcoding Works

To fully grasp what transcoding does, let's break it down into five key steps:

Step 1. Input File Selection

The system receives a media file (uploaded video, live stream) and analyzes its metadata (bitrate, resolution, format). If required, digital rights management (DRM) or content protection is checked.

Step 2. Decoding (Decompression)

The file is then decoded from its current format (e.g., H.264, VP9) into an uncompressed raw format. Audio and video streams are separated if needed.

Step 3. Pre-Processing and Modifications

If necessary, some of these optional steps are taken:

• Resolution scaling: Adjusts video quality (e.g., from 4K to 1080p).
• Bitrate adjustment: Optimizes bitrate for smoother streaming.
• Frame rate conversion: Adjusts frames per second (FPS) for smoother playback (e.g., from 60FPS to 30FPS).
• Color correction and enhancements: Improves video quality.
• Watermarking and subtitles: Adds branding or captions to the media.
• Audio processing: Normalizes volume, removes noise, or changes format (e.g., from AAC to MP3 format).

Step 4. Encoding (Compression and Format Conversion)

The media is re-encoded into the desired format and codec (for example, H.265 or AV1). Different compression settings are applied based on output needs (like high-efficiency vs. lossless encoding).

Step 5. Packaging and Multiplexing

The encoded video and audio streams are multiplexed into a container format (MP4, MKV, HLS). To optimize playback across different devices and network conditions, adaptive bitrate streaming (ABR) variants may be generated in multiple resolutions (240p, 480p, 1080p).

These steps outline the core process of transcoding, but there are additional steps you can take to further enhance video quality and playback.

Quality Control and Optimization

After transcoding, the media file undergoes quality control to detect artifacts, sync issues, or encoding errors. Advanced AI-driven optimization or manual review ensures that the final output meets high-quality standards.

Output and Distribution

Once optimized, the transcoded media is either stored, streamed, or distributed to users. For streaming, the file is delivered through a Content Delivery Network (CDN) to ensure fast and smooth playback across different devices. For storage, the media is saved for future processing or redistribution.

5 Benefits of Transcoding

Understanding transcoding and its impact can help maximize your OTT streaming business. Here’s how media transcoding benefits your platform:

1. Wider Audience Reach

Transcoding supports multiple devices (smart TVs, smartphones, tablets, game consoles, browsers) and converts content into formats compatible with different operating systems and streaming protocols (HLS, DASH).

2. Cost-Efficiency and Lower Bandwidth Usage

Video transcoding reduces CDN costs and optimizes storage by compressing video files efficiently. Instead of keeping multiple raw versions, transcoding ensures that only the necessary formats are stored, saving space and lowering expenses.

3. Revenue Growth and Monetization

A smooth viewing experience boosts engagement and retention, increasing ad impressions and subscription renewals. Transcoding enables ad-supported content by ensuring high-quality, buffer-free playback, making monetization more effective.

4. Content Protection

With transcoding, you can integrate Digital Rights Management (DRM) for secure video streaming and content delivery. This safeguards copyrighted content and prevents unauthorized access. It also adjusts formats to meet regional licensing requirements, ensuring compliance with distribution regulations.

5. Future-Proofing and Scalability

Transcoding adopts newer codecs (e.g., AV1, HEVC) to improve compression and streaming efficiency. It scales effortlessly to support growing content libraries and global user bases.

Types of Transcoding

Before diving into the types of transcoding, it's important to understand that transcoding falls into three main categories based on:

• Media processing methods (how the file is processed during transcoding).
• Functionality (specific changes made to the file).
• Application (where and how transcoding is used).

Each category includes different transcoding types, as shown in the tables below.

Based on the Media Processing Method

Type	Purpose	Used for	Example
Lossy Transcoding	Reduces file size by removing some data, potentially lowering quality.	Streaming services to optimize bandwidth.	Converting a high-bitrate 4K video to a lower-bitrate 1080p version.
Lossless Transcoding	Retains all original data while converting to a different format.	Professional editing or archival purposes.	Converting a FLAC audio file to ALAC without losing quality.

Based on Functionality

Type	Purpose	Used for	Example
Standard Transcoding	Fully decodes a file, modifies it (if needed), and re-encodes it.	When changing both codec and format.	Converting an H.264 video to H.265 for better compression.
Transrating	Adjusts only the bitrate without changing the format or codec.	Optimizing streaming quality across different network conditions.	Reducing a 1080p video’s bitrate from 6 Mbps to 3 Mbps for mobile users.
Transizing	Changes only the resolution (frame size) while keeping the format and codec the same.	Adaptive bitrate streaming (ABR) in OTT platforms.	Converting a 4K video to 1080p, 720p, and 480p for different devices.
Transmuxing	Converts the container format without changing the encoded media.	Smoother delivery; faster than full transcoding.	Changing an MP4 file to HLS (HTTP Live Streaming) for online streaming.

Based on Application

Type	Purpose	Used for	Example
Live Transcoding	Converts a live video stream into multiple formats and bitrates in real time.	Live sports streaming, gaming broadcasts, and webinars.	A Twitch stream being delivered in 1080p, 720p, and 480p simultaneously.
Offline (Batch) Transcoding	Processes pre-recorded media files for on-demand playback.	VOD services like Netflix, YouTube, and Hulu.	Preparing a movie in different resolutions before uploading.

Why is Transcoding Important for Video Streaming?

Transcoding is the foundation of seamless video streaming. It ensures adaptive bitrate streaming (ABR), cross-device compatibility, and efficient bandwidth usage, making it essential for any OTT platform.

Streaming is Possible Without Transcoding, But at What Cost?

Without transcoding, there’s no adaptive bitrate streaming, so viewers with slow internet may struggle with buffering, while others with high-speed connections won’t get the best quality. Plus, streaming raw or high-bitrate files consumes more data, increasing costs and reducing efficiency.

On top of this, you won’t be able to provide device compatibility, and your content won’t be optimized for different formats, resolutions, and codecs, making playback issues common on various devices. This can ultimately harm your audience reach and engagement efforts.

Transcoding Delivers a Better User Experience and Engagement

If your OTT business is growing, transcoding becomes even more critical. As new technologies, devices, and streaming standards emerge, failing to adapt could push users toward competitors with better video experiences. (Obviously, that’s not what you want).

Simply put, a smooth, uninterrupted viewing experience keeps users engaged and satisfied. Imagine a viewer effortlessly streaming on their preferred device with zero playback issues—just sitting back, relaxing, and enjoying. That’s what terrific transcoding delivers.

So, user satisfaction is what you want and need for your OTT business to grow!

inoRain can help you get the most out of transcoding. Contact us today and seize the opportunity to succeed.

Transcoding in OTT, Live Streaming, and P2P Streaming

Transcoding plays a huge role in OTT, live streaming, and P2P streaming by providing high-quality features for streaming.

Transcoding in OTT Streaming

OTT platforms rely on transcoding to deliver smooth, buffer-free streaming across different devices. Want adaptive bitrate streaming (ABR)? Use transcoding. Need flawless playback on any device? Transcoding makes it happen!

Live Streaming Without Transcoding: The Downsides

Live streaming without transcoding has limitations. Here is the process:

• The stream is sent exactly as captured, with no bitrate, resolution, or format adjustments.
• This results in low latency, but you lose ABR, device compatibility, and audience reach.
• Viewers need higher bandwidth, leading to limited accessibility and higher data consumption.

Fortunately, transcoding solves all these problems.

Transcoding in P2P Streaming

In P2P streaming, transcoding does tons of work by reducing bandwidth usage and improving playback quality. On top of that, transcoding also lowers infrastructure costs, which alone is a game-changer!

The Right Transcoding Solution for Your Business

We can go on and on about how beneficial transcoding can be for your OTT business and streaming in general. But the point is to find the right solution to get all these benefits.

No need to look further—inoRain has you covered! With cutting-edge transcoding integrations and continuous innovations for OTT platforms, inoRain provides the best streaming OTT solutions to help your business thrive.

Conclusion

Now that you understand what transcoding means, it’s clear that it plays a vital role in delivering high-quality, engaging, and device-compatible OTT streaming. From adaptive bitrate streaming (ABR) to bandwidth optimization, transcoding enhances the viewing experience and maximizes your OTT business’s potential.

If you've made it this far, you're already on the right path! With this knowledge, you can make informed decisions to improve your streaming platform and boost profitability.

Ready to unlock the full power of transcoding for your OTT business? Contact us today to take your OTT business to new heights.

FAQs

What is transcoding?

Transcoding involves decompressing encoded digital media, changing its characteristics (such as codec, resolution, or bitrate), and then re-compressing it into a new format.

Example: You have a video file in a high-resolution format (like 4K) that's too large to easily play on your smartphone. You use software to transcode that 4K video into a lower-resolution MP4 file. The video now plays smoothly on your smartphone, and it takes up less storage space

How does transcoding differ from encoding?

Encoding is the process of taking a raw digital file and compressing it into a specific format. In contrast, transcoding takes an already encoded file and decodes it, adds changes, and then encodes it back to a digital format for content distribution.

Why is adaptive bitrate streaming important in transcoding?

In transcoding, adaptive bitrate streaming optimizes efficiency and helps with device compatibility.

What are the common codecs used in transcoding?

The common video codecs used in transcoding are H.264 (AVC), H.265 (HEVC), VP9, and the next-generation AV1. For audio, AAC, MP3, and Opus codecs are used.

How does transcoding affect live streaming performance?

Transcoding optimizes bitrate, resolution, and format to enhance live streaming quality. It ensures efficient bandwidth use, supports adaptive bitrate streaming, and delivers low-latency playback, leading to a smoother viewing experience. Simply put, great transcoding equals high-quality live streaming.

How does transcoding support P2P streaming?

Peer-to-Peer (P2P) streaming distributes video data directly between users instead of relying on a central server. Transcoding improves P2P streaming by enabling better load balancing, reducing bandwidth usage, and optimizing video quality for diverse network conditions.

What is Plex transcoding?

Plex transcoding is the process of converting media files within the Plex Media Server to ensure smooth playback on different devices and network conditions. If a device doesn’t support the original format, Plex transcodes the file into a compatible resolution, codec, or bitrate in real time, reducing buffering and improving performance.

What is hardware transcoding?

Hardware transcoding uses a dedicated GPU, ASIC, or specialized hardware encoder (such as Intel Quick Sync, NVIDIA NVENC, or AMD VCE) to process video conversions faster and more efficiently than software-based transcoding. It reduces CPU load, improves energy efficiency, and enables real-time transcoding for live streaming and high-resolution media.