Wavelet analysis involves representing a signal as a sum of wavelet functions of varying location and scale. Wavelet transforms allow for efficient video compression by removing spatial and temporal redundancies. Without compression, transmitting uncompressed video would require huge storage and bandwidth. Using wavelet compression, a day of video could be stored using the same space as an uncompressed minute. The discrete wavelet transform decomposes a signal into different frequency subbands, making it suitable for scalable and tolerant video compression standards like JPEG2000. Wavelet compression provides better quality at low bit rates compared to DCT techniques like JPEG.