Some embodiments of the invention provide a method for encoding a video signal that is formed by a series of successive images. Each image includes several sections, and each section has a set of image values. To encode a particular section of a particular image, the method initially partitions the particular section into several sub-sections. For each of at least two particular sub-sections, the method then computes a statistical parameter regarding the image values of the particular sub-section. The method compares the computed statistical parameters, and based on the comparison, selects an encoding technique from a set of encoding techniques to encode the particular section. In some embodiments, the set of encoding schemes includes a first scheme that encodes the selected section without reference to any other section of any other image, and a second scheme that encodes the selected section by reference to at least one other section.