There are increasing demands for ultra low bit-rate video image transmission. We present a new formulation of moving object segmentation and motion estimation to quantify the potential gain in using object-oriented motion compensation in image sequence coding. Motivated by real-valued parameter estimation required in object--oriented motion-compensated video source coding, a framework motivated by Rissanen 's minimum description length (MDL) principle is proposed to more tightly couple motion estimation and object segmentation algorithms to the overall objective of minimizing source bit-rate. A new objective function is constructed and a suboptimal procedure to segment and estimate moving objects in a scene is proposed. Each object is represented by chain-coded block-boundaries, affine motion parameters, and motioncompensated prediction error. A number of experimental comparisons between blockand object-oriented coding schemes suggests a significant potential coding gain using object-oriented motion-compensated coding.
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