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This paper provides a performance analysis of the scalable video coding (SVC) extension of H.264/AVC. A short overview presenting the main functionalities of SVC is given and main issues in encoder control and bit stream extraction are outlined. Some aspects of rate-distortion optimization in the context of SVC are discussed and strategies for derivation of optimized configurations relative to the investigated scalability scenarios are presented. Based on these methods, rate-distortion results for several SVC configurations are presented and compared to rate-distortion optimized H.264/AVC single layer coding. For reference, a comparison to rate-distortion optimized MPEG-4 visual (advanced simple profile) coding results is provided. The results show that the performance gap between single layer coding and scalable video coding can be very small and that SVC clearly outperforms previous video coding technology such as MPEG-4 ASP.