Bit-rate reduction of an image signal, by an algorithm recognizing the high degree of correlation ascertainable in specific images. The reproduced image does not replicate the original when viewed in direct comparison, but the losses are not obvious or recognizable under the intended display conditions. The algorithm may apply transform coding, predictive techniques, and other modeling of the image signal, plus some form of entrophy encoding. While the image appears unaltered to normal human vision, it may show losses and artifacts when analyzed in other systems (i.e., chroma key, computerized image analysis, etc.). The lost information cannot be regenerated from the compressed bit stream.