Hardware encoding vs. software encoding for live streaming

Hardware encoders are reliable, but expensive. Software ones are less pricey but also less robust. Figure out what your broadcast needs are before you choose one or the other.
Hardware encoding vs. software encoding for live streaming

Every cog in the machine of your streaming setup is vital, so much so that it would almost be unfair to single out one component as the most important. But your encoder is pretty essential — if you don’t have an encoding solution, you’re not streaming anywhere. Let’s get better acquainted with the heart and brain of the streaming setup and how to choose the best encoder for your live stream.

What is a video encoder?

An encoder takes raw analog or digital video and compresses it into another digital format that’s suitable for broadcasting. You cannot take the footage captured by your video camera and send it directly to a YouTube live stream, for example. It has to be encoded first.

When you stream to a social media profile within the social network’s app — like using the Facebook app to go live on your Facebook profile — the app takes care of the encoding for you. When you want to stream from your laptop or desktop computer, you need another solution for encoding. For most live streaming platforms, you need to convert the video signal into an H.264 format, an industry standard for video compression.

There are two types of encoders you can use to live stream:

  • Software encoders: Encoding programs you install and run on your computer. Software encoders capture your audio and video input, compress it, then deliver it to your end platform, such as Facebook, Twitch and YouTube.
  • Hardware encoders: Pieces of equipment with encoding as their sole purpose. Some hardware encoders connect directly to a camera, but not always.

The encoder is the translator and the communicator in your streaming setup, which is why it’s so important. Take it out of the equation and video streaming platforms would have a hard time understanding and reproducing the data you’re sending them.

Here are some of the most popular choices among streamers for software encoders, also known as live streaming software:

  • OBS Studio: This free, open-source encoding software is a top choice among streamers of all kinds and you can find a lot of tutorials and resources online to help you master it.
  • XSplit: Professional streamers use XSplit for capturing gameplay, streaming presentations, and hosting live events.
  • vMix: vMix is a live streaming software for Windows users. You can upgrade the version you have for higher numbers of video inputs.
  • Streamlabs: Streamlabs is a more user-friendly version of OBS, geared toward beginning streamers.
  • Restream Studio: Restream Studio is a cloud-based streaming solution, so you don’t have to download or install anything to use it.

Some popular hardware encoders include:

  • Teradek: Teradek encoders are great for on-the-go streaming and video production, especially the VidiU Go.
  • NVIDIA-based graphic cards: Many graphic cards using NVIDIA can also encode to help free up resources on your computer.
  • ATEM Mini Pro: The ATEM Mini Pro is technically a video switcher, but it also has encoding functionality (one of the few that does).
  • Niagara Video encoders: Niagara encoders also do transcoding and come in different models to handle podcasting, event broadcasting and video streaming.
  • TriCaster encoders: There are several TriCaster video encoders with different capabilities to handle a small, at-home stream or a large video production.

Software and hardware encoders: What are the pros and cons of each?

So, should you use a software encoder or a hardware encoder? An encoder is basically an algorithm and the hardware needed to run it. In some sense, hardware encoders are very similar to their software counterparts because, by the time you’ve put them into a setup, that’s what they’ll both be — algorithms and hardware.But that’s the end of their similarities. The two differ in fundamental ways, and each comes with its own set of pros and cons.

What are the pros and cons of hardware encoders?

Hardware encoders pack all you need in a neat little box. They run with an encoding algorithm, as well as a powerful processing unit whose sole job is to run that algorithm. Usually, there will be some sort of an interface so you can choose between options and, for example, pick the encoding codec or the destination of the stream.

The pros of using a hardware encoder are:

  • Great performance, especially when you need extremely high-quality streaming.
  • Awesome reliability, given that they’re built with one purpose — to encode.
  • Higher encoding speed, leading to lower latency.

Hardware encoders do have their downsides, though, including:

  • The price, because their costs start at a couple hundred dollars and only increase.
  • Lack of functionalities, so you’ll have to get additional gear for actions such as switching.
  • Difficult to upgrade, especially when compared with software encoders.Hardware encoders — they encode, and that’s it. The good ones do it incredibly quickly, but they’ll also cost you an arm and a leg. If you can justify the investment, though, you probably won’t look back. Just be ready to make additional investments, because hardware encoders are a one-trick pony

What are the pros and cons of software encoders?

Software encoders don’t come with their own hardware. They are completely reliant on the CPU of their host computer for processing power. That can pose some problems, notably the encoding software using up your computer’s resources.

The key traits that make software encoders so popular are:

  • Affordability, because even the good ones come with no additional costs.
  • Flexibility, as they can ingest multiple feeds, but can also act as switchers, effects and more.
  • Customizability, as they let you change the bitrate and even the encoding type.

It’s not all gravy with software encoders, though, because of their:

  • High dependence on the host, and they’re only as good as the computer running them.
  • Higher latency, thanks to the slower encoding.
  • Overall lower performance, especially in lower-end setups or when multitasking.

Software encoders have their flaws. But the good ones are capable of delivering a surprising bang for their buck, and allow for more creativity thanks to a myriad of customization options. Still, a high-end software encoder probably won’t beat a high-end hardware encoder when it comes to quality and latency.

Do you need software or hardware encoding for your live stream?

What you want and what you need are two completely different things. You should keep this in mind when choosing gear, because the goal is usually to get the best possible option for the money you have — and that often means making compromises.

Always choose the gear that meets your needs. Regular streams usually don’t need to match the quality of a professional broadcast.

Affordability is the major factor that will influence your decision. Hardware encoders are expensive, and they’ll also force you to buy additional gear to fill in the gaps left by their lack of functionalities. High-end software encoders can be expensive, too. Often enough, you’ll need a dedicated computer just to run them.

Still, a good software encoder and a decent computer can get you a long way in the streaming world. With so many other parts of the setup to spend money on — good microphones, for example — getting a computer and installing streaming software will save you money to invest in the camera, mics, or a better internet connection.

So unless you’re a professional broadcaster, a software encoder should keep you happy and streaming successfully for a while. It’s cheaper, more accessible, and easier to use — a clear winner in most situations.

Cloud-based live streaming with Restream Studio

If you don’t want to shell out a bunch of cash for a hardware encoder and you don’t want to download any programs to take up space on your computer, there is another option: cloud-based live streaming solutions. With a live streaming web app like Restream Studio, the encoding is done in the cloud and you can run your entire broadcast from a web browser. All you need to get started is a webcam, microphone, streaming device and internet connection.

Restream Studio is also super easy to use and has a ton of features to make your stream more professional, including:

  • Captions, graphics and overlays
  • Split-screen streaming
  • Sharing slides and presentations
  • Adding remote guests to the stream
  • Playing copyright-free background music
  • Custom backgrounds, logos and graphics
  • Chat overlay
  • Multistreaming

Create stunning live videos

Restream Studio is the easiest way to create high-quality live videos on multiple platforms at once. It's user-friendly and offers an engaging viewer experience.

Get started
  • Casual streaming from home: If you want to go live every now and then from a home office or bedroom, you can get away with a setup that requires fewer resources. One mic, one camera, a light or two, and a free software encoder like OBS Studio should do the trick.
  • IRL streaming: If you are streaming on the go, your best bet is a portable hardware encoder or streaming directly with the app you want to send your content to.
  • Streaming a full-scale virtual broadcast: If you are streaming a virtual event, you’ll need professional-quality video and reliable equipment, so a hardware encoder is a safer option for you. Integrating an encoder into your setup will take some technical expertise and a bigger budget.
  • Streaming classes or webinars: If you are presenting slides, pre-recorded videos, or other assets, you can usually do so with a software encoder. Your computer won’t need as many resources to run a slideshow as it would for a video game, so you can afford to encode with your computer, using one of the paid software encoders if you want a more professional look to your broadcast. That being said, you may consider a hardware encoder if you’re running tutorials for programs that use a lot of resources as well, like video editing or illustration software.
  • Live product launches: Broadcasting the launch of your new product live can help drum up excitement for it. The type of encoder and streaming setup you have depends on what you’re planning for the launch, but generally, the more cameras and people involved in your broadcast, the more likely you are to need a hardware encoder.Streaming a podcast or interview: Podcasts and interviews typically have pretty pared-down setups, so you can get away with a software encoder. Consider investing in one of the paid ones, though, for better usability and a more professional quality.

How to successfully live stream with a software encoder

Now that you’ve chosen your encoder, we can turn to the next big step: adding the encoder to the setup, and connecting it all together in a successful stream. No pressure.

Here’s how you would do it with OBS Studio:

  1. Set up the audio and video sources. Place the cameras and the microphones where you want them for the stream and connect them to their capture cards.
  2. Add the audio and video in OBS Studio. Set up audio in Options and add visual sources from the Sources menu.
  3. Configure the live stream. You should configure settings such as the bitrate, but also remember to create different scenes for smoother switching later.
  4. Connect the platforms. OBS Studio connects to one platform at a time, and you’ll need to find the stream key to do it.
  5. Test your live stream. Check if everything looks good in the preview or set your stream to private if your platform allows it and watch it on another computer.

If you want to reach an even wider audience with your live streams using a software encoder like OBS, you might want to use a multistream tool such as Restream. Right off the bat, it helps you with:

  • Getting a wider reach, thanks to native support for over 30 platforms and a solution for platforms that aren’t supported natively.
  • Simplifying the setup, because it can hold the URLs and stream keys for every platform you use.
  • An easy learning curve, so you’ll be able to set everything up and deploy it within minutes of the initial registration.
  • Being easy on the budget, because it lets you start for free and then pay as you need advanced features. Plus, it works on Macs, too.

The success of a live stream comes down to the quality of your content, both in terms of what it is (the content) and how you present it (the technical side). So work hard to develop good content ideas, but always remember to do a technical check before going live. If you want to reach a wider audience, consider multistreaming with Restream.


Is it better to use software or hardware for streaming?

One isn’t necessarily better than another; both hardware and software encoders have pros and cons. The best choice depends on what you’re using it for and the type of stream you’re broadcasting. Typically, a stream that’s more involved with multiple visual and audio sources is better off with a hardware encoder, whereas a stream with only a few sources that doesn’t require professional quality works well with a software encoder.

Can you live stream without an encoder?

You cannot live stream to most platforms without an encoder. The only way around this is if you go live within an app, like Facebook or Twitter. This method limits you significantly, however, and you can’t multistream to several platforms at once.

What does an encoder do for live streaming?

An encoder takes your raw video footage and compresses it into a digital format that’s acceptable for end platforms like Twitch, Facebook and YouTube. An encoder is pretty much a must-have for most live streaming setups.

Does hardware encoding affect video quality?

The encoder you use, whether hardware or software, has a big impact on the performance and quality of your stream. If you want to stream at a higher resolution and frame rate, you need an encoder that’s powerful enough to take some of the load off your computer and still provide the power you need for a high-quality stream.


For most people who are just getting into live streaming, software encoders are a better choice than hardware encoders. They provide an accessible entry point, letting people with limited budgets and resources start live streaming.

As time goes by and your production budget gets bigger, you can decide to go with a hardware encoder. You can also combine hardware and software encoders for a hybrid setup. Whatever you choose, use Restream to push your broadcast to multiple platforms at once so you can double or even triple your audience.

Get started today.

It feels good to reach more viewers.

Try it for free