The content of this White Paper has originally been published in Signal Processing: Image Communication journal.

New generations of video compression algorithms, such as those included in the under development High Efficiency Video Coding (HEVC) standard, provide substantially higher compression compared to their ancestors. The gain is achieved by improved prediction of pixels, both within a frame and between frames. Novel coding tools that contribute to the gain provide highly uncorrelated prediction residuals for which classical frequency decomposition methods, such as the discrete cosine transform, may not be able to supply a compact representation with few significant coefficients. To further increase the compression gains, this paper proposes transform skip modes which allow skipping one or both 1D constituent transforms (i.e. vertical and horizontal), which is more suitable for sparse residuals. The proposed transform skip mode is tested in the HEVC codec and is able to provide bitrate reductions of up to 10 % at the same objective quality when compared with the application of 2D block transforms only. Moreover, the proposed transform skip mode outperforms the full transform skip currently investigated for possible adoption in the HEVC standard.