  The prediction step is a very important part of hybrid video codecs. In this
contribution, a novel spatio-temporal prediction algorithm is introduced. For
this, the prediction is carried out in two steps. Firstly, a preliminary
temporal prediction is conducted by motion compensation. Afterwards, spatial
refinement is carried out for incorporating spatial redundancies from already
decoded neighboring blocks. Thereby, the spatial refinement is achieved by
applying Non-Local Means de-noising to the union of the motion compensated
block and the already decoded blocks. Including the spatial refinement into
H.264/AVC, a rate reduction of up to 14 % or respectively a gain of up to 0.7
dB PSNR compared to unrefined motion compensated prediction can be achieved.
