This SBIR Phase II project deals with improved MPEG-based video compression techniques and their implementation for very high-resolution video applications found in the emerging electronic cinema industry. The electronic cinema is a motion picture theater in which conventional film projection is replaced by a high-resolution video system. The system employs highly compressed video transmitted by satellite to the theater, which contains a digital video recorder, real-time decompression hardware, and an advanced light-valve projector. The principal investigator is developing a complete set of improved compression algorithms and implementing them in a mixed hardware-software laboratory prototype.