Development of very-low-birate video and audio codecs is an essential part of the Gulo project. Simplicity and clarity of the underlying source code are a priority. Openness and performance of a video codec is not enough, the codec should be designed with a strong desire to make it well structured, extendable and easy to understand. Therefore, the developped codecs are also built with the hope that it will serve as the basis for the creation of other great codecs that will derive from them.

The first codec built as part of the Gulo project is a H.263 based video codec. It was implemented from scratch with the desire to produce a very clean implementation of the existing H.263 standard. The source code is written entirely in ANSI C and consists only of a few hundred lines of code. The encoder and decoder are available as a shared library and can be accessed through a very simple interface. All block operations are located in a single file, which should make the task of optimising the code for a specific processor very easy. Currently this codec compares favorably against other very-low-bitrate video codecs such as MPEG-4. Plans are underway to implement annexes of the H.263+ standard, but without losing the concern of keeping the code simple and structured. An optimised version of the code for ARM processors would be nice too. This shouldn't be difficult to do, since all the operations on blocks are grouped together and the codec uses only integer arithmetic.

There is currently some research on a wavelet-based codec. The simplicity of the wavelet transform and it's multiresolution features make it an attractive tool for video coding. However some important problems are to be solved, such as finding a way to efficiently integrate the wavelet transform with a form of motion compensation. Although wavelets are inherently well suited for still image coding, it is more difficult to find a way of coding video with them. Therefore, current development of this codec is still experimental.