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In this paper, we describe a video coding design that enables a higher coding efficiency than the HEVC standard. The proposed video codec follows the design of block-based hybrid video coding, but includes a number of advanced coding tools. A part of the incorporated advanced concepts was developed by the Joint Video Exploration Team, while others are newly proposed. The key aspects of these newly proposed tools are the following. A video frame is subdivided into rectangles of variable size using a binary partitioning with variable split ratios. Three new approaches for generating spatial intra prediction signals are supported: A line-wise application of conventional intra prediction modes, coupled with a mode-dependent processing order, a region-based template matching prediction method and intra prediction modes based on neural networks. For motion-compensated prediction, a multi-hypothesis mode with more than two motion hypotheses can be used. In transform coding, mode dependent combinations of primary and secondary transforms are applied. Moreover, scalar quantization is replaced by trellis-coded quantization and the entropy coding of the quantized transform coefficients is improved. The intra and inter prediction signals can be filtered using an edge-preserving diffusion filter or a non-linear DCT-based thresholding operation.

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Today, H.264/AVC is the state-of-the-art video coding standard. Especially after the 2004 development of its High Profile (HP), it has become one of the primary formats in high definition video content delivery. Recently, a joint Call for Proposals (CfP) on video compression technology has been issued by ISO/IEC MPEG and ITU-T VCEG, targeting at the next generation of video compression standards with substantially higher compression capability than H.264/AVC. As a response to this CfP, Fraunhofer HHI proposed a newly developed video coding scheme which achieves bit rate savings of around 30% when compared to H.264/AVC HP. This paper describes the proposed video coding scheme and discusses its innovative features