Video compression is a practical implementation of source coding in information theory. In practice, most video codecs are used alongside audio compression techniques to store the separate but complementary data streams as one combined package using so-called container formats.
Uncompressed video requires a very high data rate. Although lossless video compression codecs perform at a compression factor of 5 to 12, a typical H.264 lossy compression video has a compression factor between 20 and 200.
The two key video compression techniques used in video coding standards are the discrete cosine transform (DCT) and motion compensation (MC). Most video coding standards, such as the H.26x and MPEG formats, typically use motion-compensated DCT video coding (block motion compensation).
Video data may be represented as a series of still image frames. Such data usually contains abundant amounts of spatial and temporal redundancy. Video compression algorithms attempt to reduce redundancy and store information more compactly.
Most video compression formats and codecs exploit both spatial and temporal redundancy (e.g. through difference coding with motion compensation). Similarities can be encoded by only storing differences between e.g. temporally adjacent frames (inter-frame coding) or spatially adjacent pixels (intra-frame coding). Inter-frame compression (a temporal delta encoding) is one of the most powerful compression techniques. It (re)uses data from one or more earlier or later frames in a sequence to describe the current frame. Intra-frame coding, on the other hand, uses only data from within the current frame, effectively being still-image compression.
A class of specialized formats used in camcorders and video editing use less complex compression schemes that restrict their prediction techniques to intra-frame prediction.
Usually, video compression additionally employs lossy compression techniques like quantization that reduce aspects of the source data that are (more or less) irrelevant to the human visual perception by exploiting perceptual features of human vision. For example, small differences in color are more difficult to perceive than are changes in brightness. Compression algorithms can average a color across these similar areas to reduce space, like those used in JPEG image compression. As in all lossy compression, there is a trade-off between video quality and bit rate, cost of processing the compression and decompression, and system requirements. Highly compressed video may present visible or distracting artifacts.
Other methods than the prevalent DCT-based transform formats, such as fractal compression, matching pursuit and the use of a discrete wavelet transform (DWT), have been the subject of some research, but are typically not used in practical products (except for the use of wavelet coding as still-image coders without motion compensation). Interest in fractal compression seems to be waning, due to recent theoretical analysis showing a comparative lack of effectiveness of such methods.
Inter-frame coding works by comparing each frame in the video with the previous one. Individual frames of a video sequence are compared from one frame to the next, and the video compression codec sends only the differences to the reference frame. If the frame contains areas where nothing has moved, the system can simply issue a short command that copies that part of the previous frame into the next one. If sections of the frame move simply, the compressor can emit a (slightly longer) command that tells the decompressor to shift, rotate, lighten, or darken the copy. This longer command remains much shorter than intraframe compression. Usually, the encoder will also transmit a residue signal which describes the remaining more subtle differences to the reference imagery. Using entropy coding, these residue signals have a more compact representation than the full signal. In areas of video with more motion, the compression must encode more data to keep up with the larger number of pixels that are changing. Commonly during explosions, flames, flocks of animals, and in some panning shots, the high-frequency detail leads to quality decreases or increases in the variable bitrate.