Apparatus for recording and reproducing video data is described that utilizes data compression to increase storage capacity. Real time input video data is decorrelated, quantized and entropy encoded. User control of a compression control parameter, such as quantization step width, is provided so that the user can adjust the loss of fidelity through compression to a desired level. The compressed data is output to a storage RAM 38 at an unregulated varying data rate. The system allows real time storage of video data in a manner in which the loss of fidelity is held constant and the amount of storage capacity required for particular sections of input video data varies with the information content of that input video data.