MAT LAB Project On Video Coding Based On SSIM System.We further develop an MB level perceptual mode selection scheme and a frame level global quantization matrix optimization method. Extensive simulations and subjective tests verify that, compared with the H.264/AVC video coding standard, the proposed method can achieve significant gain in terms of rate-SSIM performance and provide better visual quality Over the past decade, there has been an exponential increase in the demand for digital video services such as high-definition television, web-based television, video conferencing and video-on-demand. To facilitate these services, it demands to significantly reduce the storage space and bandwidth of visual content production, storage and delivery.