An apparatus, method, and carrier medium carrying computer-readable code to implement a method that includes generating a difference picture of an accepted picture of a time sequence of pictures minus an estimate of the previous picture in the sequence. The generating of the difference picture includes forming quantized coefficients and passing the quantized coefficients via a prediction loop to generate the estimate of the previous picture. A spatial filter is applied to at least a component of the difference picture such that the forming of quantized coefficients is from a spatially filtered difference picture. The spatial filter is a noise reducing spatial filter configured such that there is a fixed delay between the filter input picture and the filter output picture. The fixed delay is significantly less than the time between consecutive pictures in the time sequence.