A system comprises an encoder configured to compress video data using an in-loop noise generation process that generates noise in the compression loop at a sub-image portion level of granularity, such as at a block level. The encoder includes noise model and/or noise model input parameter information in an encoded bit stream. Also, a system includes a decoder configured to receive such a bit stream and decompress the video using an in-loop noise generation process that generates noise in the decompression loop at a sub-image portion level of granularity.