SUMMARY
Although Shannon introduced the concept of a rate distortion function in 1948, only in the last decade has the methodology for developing rate distortion function lower bounds for real-world sources been established. However, these recent results have not been fully exploited due to some confusion about how these new rate distortion bounds, once they are obtained, should be interpreted and should be used in source codec performance analysis and design. We present the relevant rate distortion theory and show how this theory can be used for practical codec design and performance prediction and evaluation. Examples for speech and video indicate exactly how the new rate distortion functions can be calculated, interpreted, and extended. These examples illustrate the interplay between source models for rate distortion theoretic studies and the source models underlying video and speech codec design. Key concepts include the development of composite source models per source realization and the application of conditional rate distortion theory.