A method for diagonal processing of video data includes separating diagonally arranged data from rectilinearly arranged data in a video stream, rotating the diagonally arranged data to a rectilinear position; and compressing the rotated diagonally arranged data by a rectilinear compression algorithm. An apparatus for diagonal processing of video data includes a demultiplexer receptive to a video stream and developing a plurality of separated color planes, a number of address generators associated with the plurality of color planes, and a data compressor receptive to the address generators and operative to compress the plurality of color planes with a rectilinear compression algorithm.