We present an adaptive model-driven bit-allocation algorithm for video sequ
ence coding. The algorithm is based on a parametric rate-distortion model,
and facilitates both picture- and macroblock-level hit allocation. A region
classification scheme is incorporated into the algorithm, which exploits c
haracteristics of human visual perception to efficiently allocate bits acco
rding to a region's visual importance. The application of this algorithm to
MPEG video coding is discussed in detail. We show that the proposed algori
thm is computationally efficient and has many advantages over the MPEG2 TM5
bit-allocation algorithm.