A codec (compressor-decompressor) is a software or hardware component that compresses audio and video files to reduce their size and decompresses them at playback. In digital signage, choosing the right codec directly affects file size, bandwidth consumption, playback smoothness and required hardware capability.
The most common codecs in digital signage today are H.264 (universal compatibility, balanced quality), H.265/HEVC (better compression at the cost of more CPU), and AV1 (best efficiency, newer hardware support). Modern displays and players from Samsung, LG, BrightSign and Android-based devices support all major codecs natively.