A method of transcoding a video signal made up of an input bit stream (X) representative of frames of a video and representative of the non-zero transform coefficients of the video signal, each frame being made up of blocks of pixels, there being a block of data within the input bit stream corresponding to each block of pixels, the method comprising: for the bit stream of a frame of the video signal, identifying whether the frame is an I frame, a P frame or a B frame, characterised in that if the frame is identified as an I frame, the method comprises performing no transrating operation on the frame and if it is identified as a P frame or a B frame: the method comprises determining the number (N) of non-zero transform coefficients (C 1 to C N ) within each block for a plurality of blocks of data; for each block, disregarding a proportion of the number (N) of non-zero transform coefficients, wherein the proportion of non-zero transform coefficients disregarded is determined by a factor of α, wherein there are N non-zero transform coefficients in a block of a received frame and M in a block of the transrated video stream, wherein M = α N; and generating an output bit stream (Y) comprising all the coefficients from blocks within I frames and only the retained coefficients of blocks from the P and B frames, wherein there is a non-linear relationship between M and N and α is varied in real time on a per block basis to control dynamically the bit-rate of the output bit stream by a method such as a least mean squares relationship; and wherein α is defined as a function of output bit-rate and desired bit-rate. for the bit stream of a frame of the video signal, identifying whether the frame is an I frame, a P frame or a B frame, characterised in that if the frame is identified as an I frame, the method comprises performing no transrating operation on the frame and if it is identified as a P frame or a B frame: the method comprises determining the number (N) of non-zero transform coefficients (C 1 to C N ) within each block for a plurality of blocks of data; for each block, disregarding a proportion of the number (N) of non-zero transform coefficients, wherein the proportion of non-zero transform coefficients disregarded is determined by a factor of α, wherein there are N non-zero transform coefficients in a block of a received frame and M in a block of the transrated video stream, wherein M = α N; and generating an output bit stream (Y) comprising all the coefficients from blocks within I frames and only the retained coefficients of blocks from the P and B frames, wherein there is a non-linear relationship between M and N and α is varied in real time on a per block basis to control dynamically the bit-rate of the output bit stream by a method such as a least mean squares relationship; and wherein α is defined as a function of output bit-rate and desired bit-rate. the method comprises determining the number (N) of non-zero transform coefficients (C 1 to C N ) within each block for a plurality of blocks of data; for each block, disregarding a proportion of the number (N) of non-zero transform coefficients, wherein the proportion of non-zero transform coefficients disregarded is determined by a factor of α, wherein there are N non-zero transform coefficients in a block of a received frame and M in a block of the transrated video stream, wherein M = α N; and generating an output bit stream (Y) comprising all the coefficients from blocks within I frames and only the retained coefficients of blocks from the P and B frames, wherein there is a non-linear relationship between M and N and α is varied in real time on a per block basis to control dynamically the bit-rate of the output bit stream by a method such as a least mean squares relationship; and wherein α is defined as a function of output bit-rate and desired bit-rate. <EOS>