We present a new technique to improve the video compression ratio. In this technique, macroblock data are reordered in such a way that one block includes the important data of a macroblock, while the other three data blocks hold difference values in the horizontal, vertical, and diagonal directions. This results in reduced bit stream size because of low-valued data in the three blocks, giving a higher compression ratio. The proposed method can be easily used for error resilience applications as well. In that case, the important data block in a macroblock is transmitted on a secure channel while the remaining three blocks with difference data are sent via a lossy channel. In the case of an error in the lossy channel, the picture can still be reconstructed with a reasonably good quality using the block that contains important data transmitted on the secure channel. The proposed method generates better reconstruction quality when used at low bit rates.