A method is provided to better detect a scene change to provide a prediction to an encoder to enable more efficient encoding. The method uses a Motion Compensated Temporal Filter (MCTF) that provides motion estimation and is located prior to an encoder. The MCTF provides a Motion Compensated Residual (MCR) used to detect the scene change transition. When a scene is relatively stable, the MCR score is also relatively stable. However, when a scene transition is in process, the MCR score behavior changes, Algorithmically, the MCR score is used by comparing the sliding mean of the MCR score to the sliding median. This comparison highlights the transition points. In the case of a scene cut, the MCR score exhibits a distinct spike. In the case of a fade or dissolve, the MCR score exhibits a transitional period of degradation followed by recovery. By implementing the above detection using the MCR, the location of the I-pictures in the downstream encoding process can be accurately determined for the encoder.