A wavelet transform (WT) is applied to a data stream of high definition video frames, each comprising one or more data channels digitally representing the same image. A WT is applied to each channel. Visual-quality preserving data filters and data substitution techniques are selectively applied that typically lead to at least 90-to-1 compression of the final encoded video frame. Image edge data is extracted and preserved and image noise is reduced to enhance compressibility. After the first WT, primarily low frequency (LL) image data is retained. With each later WT, more non-LL data is retained. Temporal sequences of LL images that result from the final iteration of the wavelet transform are compressed by means of a chain of invertible differenced images. Any color space can be used. Cross-channel conditional substitution is applicable. Complete multi-resolution scalability is incorporated into the encoded product. Extra-high definition video encoding is also achievable.