Reduction of bitrate by cost calculation and macroblock level thresholding technique in H.264 encoder

Bitrate adaptation and higher compression ratio are the major issues in world of Video compression. H.264 is the latest standard for video compression with high flexibility in compression ratio, quality of video and rate adaptation. This paper explores the possibility of bitrate reduction and proposes an algorithm to calculate the cost of each 8x8 subMacroblocks. Based on the threshold and the cost of each Macroblock (MB), the MB may be discarded from coding. Thus saving expensive bits is possible with tolerable PSNR loss. This paper found that for a given set of threshold, 25% bits saving is done at higher quantization parameter with 0.6 dB PSNR loss having 0.05 loss in SSIM.