Digital video has come of age, but few people understand how it really works. Digital video is stored in a form of component video that separates the video signal into three components (YUV). This luminance and color information has to be encoded or sampled. Most video is sampled at 8 bits to form the digital representation usually called 4:2:2. In simple terms, for every four pixels, each pixel is sampled for its luminance value. Two of the pixels are then sampled for their blue value, and the other two are sampled for their red value. Another encoding scheme is 4:2:0, in which two bits are sampled for their blue value and none is sampled for its red value. This encoding uses less bandwidth and requires less storage space but produces a slightly lower-quality signal.

Both 4:2:2 and 4:2:0 encoding are used within an MPEG-2 signal. MPEG-2 is commonly used in DSS and DVD systems. Older satellite systems used MPEG-1, which uses 4:1:1 encoding. MPEG-2 has several advantages that make it the encoding of choice. For high-quality work, MPEG-2 can be encoded at 10 bit, though most encoding is 8 bit. MPEG-2 is also rate adaptive, or variable; in other words, transmission bandwidth is reduced when the image is relatively simple and bursts when more data is needed to represent the video. MPEG-1 uses a CBR (constant bit rate) so it is not as efficient during transmission or playback but can deliver about the same quality as MPEG-2.