The recent video coding standard H.264/AVC show extremely higher coding efficiency compare to any other previous standards. Although H.264/AVC can achieve over 50 % of bit rate saving with same quality using the rate-distortion process, but it brings high computational complexity. In this paper, we propose an algorithm that can reduce the complexity of the codec by reducing the block mode decision process adaptively. In this paper an efficient method is proposed to reduce the inter mode decision coding complexity using the direct prediction methods based on inter block correlation and adaptive rate distortion cost threshold for early stopping. The intra mode decision complexity is also reduced using the early intra skip method. The experimental results show that the proposed algorithm can achieve up to 43.85-74.12% speed up ratio with a little PSNR loss. Increment in bit requirement is also not much noticeable.
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