Digital video signals are broken down into thousands of elements called pixels. Between frames, many are the same. A codec takes advantage of this duplication by sending complete information on the first pixel and a brief code to repeat the values. This reduces the information sent and the bandwidth required. Interframe coding for conditional replenishment compares the changes between two frames and transmits changes.
Motion compensation predicts changes between frames and transmits only the difference.
Software holds the compression algorithm which can be upgraded. The bandwidth used is the digital equivalent of 80 Mbps or more which corresponds to a full satellite transponder or 1820 voice phone lines. This translates into high costs for signal transmission. One use of the technology is SKY PIX, a pay per view movie service based on a Compression Labs, Inc. codec marketed by NW Star Scan which offers viewers a choice of up to 40 movies. The picture quality is better than VHS transmission quality.