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We revisit the classic problem of developing a spatial correlation model for natural images and video by proposing a conditional correlation model for relatively nearby pixels that is dependent upon four parameters. The conditioning is on local texture and the conditional correlation model is presented for each of the nine 4 by 4 intra-modes used in the AVC/H.264 video coding standard. We use this conditional correlation model to calculate the conditional rate distortion function when universal side information is available at both the encoder and the decoder. We demonstrate that this side information, when available, can save as much as 2 bits per pixel for selected videos at low distortions.