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In video coding standards, a compliant bit stream must be decoded by a hypothetical decoder that is conceptually connected to the output of an encoder and consists of a decoder buffer, a decoder, and a display unit. This virtual decoder is known as the hypothetical reference decoder (HRD) in H.263 and the video buffering verifier in MPEG. The encoder must create a bit stream so that the hypothetical decoder buffer does not overflow or underflow. These previous decoder models assume that a given bit stream will be transmitted through a channel of a known bit rate and will be decoded (after a given buffering delay) by a device of some given buffer size. Therefore, these models are quite rigid and do not address the requirements of many of today's important video applications such as broadcasting video live or streaming pre-encoded video on demand over network paths with various peak bit rates to devices with various buffer sizes. In this paper, we present a new HRD for H.264/AVC that is more general and flexible than those defined in prior standards and provides significant additional benefits.