Systems and methods are described herein for processing video. An encoder implementing the systems and methods described herein may receive video data comprising a plurality of frames and may partition each frame of the plurality of frames into a plurality of coding units. The encoder may then partition a coding unit into two or more prediction units. The encoder may determine, based on one or more coding parameters, a target bit rate, and characteristics of a human visual system (HVS), a coding mode for each of the two or more prediction units to minimize distortion in the encoded bitstream. The encoder may then determine a residual signal comprising a difference between each of the two or more prediction units and each of one or more corresponding prediction areas in a previously encoded frame and then generate an encoded bitstream comprising the residual signal.