An apparatus is disclosed for performing spatial scalable compression of video information captured in a plurality of frames including an encoder for encoding and outputting the captured video frames into a compressed data stream, comprising a base layer comprising an encoded bitstream having a relatively low resolution, a high resolution enhancement layer comprising a residual signal having a relatively high resolution, and wherein a dead zone operation unit attenuates the residual signal, the residual signal being the difference between the original frames and the upscaled frames from the base layer. As a result, the number of bits needed for the compressed data stream is reduced for a given observed video quality.