A method of encoding digital media data using a predictive coding of transform coefficients, the digital media data comprising digital video or image data, the method comprising: applying a first, outer stage transform, to blocks in a current macroblock of the digital media data to produce a set of transform coefficient blocks; separating DC coefficients in the transform coefficient blocks to form a block of DC coefficients; applying a second, inner stage transform to the block of DC coefficients from the first, outer stage transform to produce a set of transform coefficients (400,500, 600) for the respective blocks in the current macroblock, wherein the set of transform coefficients (400, 500, 600) of the inner stage transform block comprises a DC coefficient for the current macroblock; determining whether one of at least two directionalities of the digital media data for the current macroblock is dominant comprising: calculating directional difference metrics for the at least two directionalities as a function of neighboring DC coefficients of preceding neighboring macroblocks in the at least two directionalities; and determining whether one of the at least two directionalities dominates based on the calculated directional differences, wherein a directionality is considered dominant when a directional difference for the directionality is more than a weighting factor times that of another directionality; when one of the at least two directionalities of the digital media data is determined to be dominant for the current macroblock, selecting a predictor of the DC coefficient of the current macroblock based on the metrics of the determined dominant directionality; and encoding the DC coefficient of the current macroblock relative to its predictor. applying a first, outer stage transform, to blocks in a current macroblock of the digital media data to produce a set of transform coefficient blocks; separating DC coefficients in the transform coefficient blocks to form a block of DC coefficients; applying a second, inner stage transform to the block of DC coefficients from the first, outer stage transform to produce a set of transform coefficients (400,500, 600) for the respective blocks in the current macroblock, wherein the set of transform coefficients (400, 500, 600) of the inner stage transform block comprises a DC coefficient for the current macroblock; determining whether one of at least two directionalities of the digital media data for the current macroblock is dominant comprising: calculating directional difference metrics for the at least two directionalities as a function of neighboring DC coefficients of preceding neighboring macroblocks in the at least two directionalities; and determining whether one of the at least two directionalities dominates based on the calculated directional differences, wherein a directionality is considered dominant when a directional difference for the directionality is more than a weighting factor times that of another directionality; calculating directional difference metrics for the at least two directionalities as a function of neighboring DC coefficients of preceding neighboring macroblocks in the at least two directionalities; and determining whether one of the at least two directionalities dominates based on the calculated directional differences, wherein a directionality is considered dominant when a directional difference for the directionality is more than a weighting factor times that of another directionality; when one of the at least two directionalities of the digital media data is determined to be dominant for the current macroblock, selecting a predictor of the DC coefficient of the current macroblock based on the metrics of the determined dominant directionality; and encoding the DC coefficient of the current macroblock relative to its predictor.