The core technology used in a video conference (VC) system is digital compression of audio and video streams in real time. The hardware or software that performs compression is called a codec (coder/decoder). Compression rates of up to 1:500 can be achieved. The resulting digital stream of 1's and 0's is subdivided into labelled packets, which are then transmitted through a digital network of some kind (usually ISDN or IP). The use of audio modems in the transmission line allow for the use of POTS, or the plain telephony network in some low-speed applications, such as video telephony, because they convert the digital pulses to/from analog waves in the audio spectrum range.

The other components required for a VC system include:

  • video input : video camera or webcam
  • video output : computer monitor or television
  • audio input : microphones
  • audio output : usually loudspeakers associated with the display device or telephone
  • data transfer : analog or digital telephone network, LAN or Internet