The header generator block generates the block headers, the slice headers, the Sequence Parameter Set (SPS), the Picture Parameter Set (PPS), and the Network Abstraction Layer (NAL) unit depending on the instance of the video frame. Skip block decision logic calculates the Sum of Absolute Difference (SAD) of the current frame 16 x 16 macro block and the previous frame 16 x 16 macro block from the motion vector predicted location. The skip block is decided using the SAD value and the SKIP_THRESHOLD input.