  A prescription to calculate the minimum number of bits needed for binary
strip detector readout is presented. This permits a systematic analysis of the
readout efficiency relative to this theoretical minimum number of bits.
Different level efficiencies are defined to include context information and
engineering properties needed for reliable transmission, such as DC-balance. A
commonly used encoding method is analyzed as an example and found to have an
efficiency only of order 50%. A new encoding method called Pattern Overlay
Compression is introduced to illustrate how the systematic analysis can guide
the construction of more efficient readout methods. Pattern Overlay Compression
significantly outperforms the above example in the occupancy range of interest.
