A transform operation (40) is performed on a block of image data to provide a block of transformed image data. A subtraction operation (41) is performed on the block of transformed image data relative to a stored block (44) of transformed image data to provide a block of difference data. A quantization operation (42) is performed on the block of difference data to provide a block of quantized difference data and the block of quantized difference data is encoded (43). A video encoder is also provided. The encoder performs a subtraction operation (41) to provide difference data in the transform domain which reduces the amount of computation required in prior art differential JPEG encoders.
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