The invention concerns a method for compressing a digitally coded video frame sequence. In the method, a given frame is divided into blocks, and the information content of selected blocks is modified, relying on information contained in a neighbouring block or blocks (prediction), and the blocks are converted from spatial representation into frequency representation. The information content of the transformed blocks is encoded by arithmetic coding. The efficiency of the coding is improved by various methods, such as dynamically partitioning the blocks into sub-blocks, or performing a compressibility analysis is the blocks before carrying out further transformations. The entropy coding uses a neural network to determine the parameters of the arithmetic coding. The frames are dynamically re-scaled, depending on available bandwidth and quality of the coded image.