In the archetypal hybrid coder, an estimate of the next frame to be processed is formed from the current frame and the difference is then encoded by some purely intraframe mechanism. In recent years, the most attention has been paid to the motion compensated DCT coder where the estimate is formed by a two-dimensional warp of the previous frame and the difference is encoded using a block transform (the Discrete Cosine Transform). This system is the basis for international standards for video telephony, is used for some HDTV demonstrations, and is the prototype from which MPEG was designed. Its utility has been demonstrated for video sequence, and the DCT concentrates the remaining energy into a small number of transform coefficients that can be quantized and compactly represented.

The key feature of this coder is the presence of a complete decoder within it. The difference between the current frame as represented as the receiver and the incoming frame is processed. In the basic design, therefore, the receiver must track the transmitter precisely, the decoder at the receiver and the decoder at the transmitter must match. The system is sensitive to channel errors and does not permit random access. However, it is on the order of three to four times as efficient as one that uses no prediction.

In practice, this coder is modified to suit the specific application.

The standard telephony model uses a forced update of the decoded frame so that channel errors do not propagate. When a participant enters the conversation late or alternates between image sources, residual errors die out and a clear image is obtained after a few frames. Similar techniques are used in versions of this coder being developed for direct satellite television broadcasting.