Digital video compression/decompression algorithms (codecs) are at the heart of many modern video products, from DVD players to multimedia jukeboxes to video-capable cell phones. Understanding the operation of video compression algorithms is essential for developers of the systems, processors, and tools that target video applications. In this article, we explain the operation and characteristics of video codecs and the demands codecs make on processors. We also explain how codecs differ from one another and the significance of these differences.