This paper describes a new adaptive quantization algorithm for video s
equence coding, which can reflect macroblock characteristics as well a
s the status of the output channel buffer. To exploit local perceptual
characteristics in the macroblock, block-based visual activities are
determined and used to decide the perceptual quantization scaling fact
or. By using the proposed scheme, coding distortion is uniformly distr
ibuted across the image and its visibility is further minimized.