The global Video Analytics Market is undergoing a profound transformation, evolving from mere surveillance into a sophisticated intelligence-gathering powerhouse. The video analytics market size is projected to reach US$ 28.71 billion by 2031 from US$ 5.64 billion in 2023. The market is expected to register a CAGR of 22.6% during 2023–2031. This explosive growth underscores the increasing recognition of video analytics as an indispensable tool across diverse industries.

A primary driver of this market surge is the escalating need for enhanced safety and security across public and private sectors. From monitoring critical infrastructure and public spaces to preventing retail theft and managing crowds, organizations are increasingly turning to video analytics to provide real-time insights and automate threat detection. This reduces reliance on constant human vigilance, improving efficiency and accuracy. The proliferation of cameras, both traditional CCTV and advanced IP-based systems, creates a vast ocean of data, making intelligent analytics solutions essential for extracting actionable intelligence.

Beyond security, the market is significantly propelled by the widespread adoption of smart city initiatives. Governments globally are investing heavily in urban infrastructure, integrating advanced surveillance systems that leverage video analytics for intelligent traffic management, congestion reduction, public safety, and streamlined urban planning. Features like license plate recognition, traffic flow monitoring, and even parking optimization are becoming integral to modern urban environments.

The integration of Artificial Intelligence (AI) and Machine Learning (ML) is the true game-changer in this market. AI-powered video analytics moves beyond simple motion detection, enabling systems to understand context, classify objects (people, vehicles, specific items), detect anomalies, and even predict potential incidents. This is leading to fewer false alarms, more precise insights, and a proactive rather than reactive approach to security and operations. For instance, in January 2025, NEC announced its integration of video analysis with generative AI to provide advice for improving work quality, showcasing the future direction of this technology.

From a market segmentation perspective, the retail sector remains a dominant force, utilizing video analytics for customer behavior analysis, optimizing store layouts, managing queues, and, crucially, for loss prevention. The government and defense sector is also a major end-user, with significant investments in public safety and smart city projects. While on-premise solutions still hold a substantial share for data security concerns, the trend towards cloud-based analytics is accelerating, offering scalability, accessibility, and reduced upfront hardware investments.

Looking ahead, the video analytics market will be shaped by continued innovation in AI algorithms, the rise of edge computing for real-time processing closer to the data source, and the convergence of physical and cybersecurity. The ability to extract valuable, actionable insights from video footage will continue to drive its growth, making it a cornerstone technology for the future of business intelligence, urban management, and security.

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Author's Bio:

Nilesh Shinde

Senior Market Research expert at The Insight Partners