Very low bit-rate video coding using patterns to represent moving regions in macroblocks exhibits good potential for improved coding efficiency. Recently an Arbitrary Shaped Pattern Selection (ASPS) algorithm and its Extended version(EASPS) were presented, that used a dynamically extracted set of patterns, of the two different sizes, based on actual video content. These algorithms, like other pattern matching algorithms failed to capture a large number of active-region macroblocks (RMB) especially when the object moving regions is relatively larger in a video sequence. As the size of the moving object may vary, superior coding performance is achievable by using dynamically extracted patterns of a larger size. This paper, proposes a three-tier Arbitrary Shaped Pattern Selection (ASPS-3) algorithm that uses three different pattern sizes for very low bit ate coding. Experimental results show that ASPS-3 exhibits better performance compared with other pattern matching algorithms, including the low-bit rate video coding standard H.263
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