Discrete cosine transform (DCT) is the orthogonal transform that is most commonly used in image and video compression. The motion-compensation residual (MC-residual) is also compressed with the DCT in most video codecs. However, the MC-residual has different characteristics from a nature image. In this paper, we develop a new orthogonal transform-rotated orthogonal transform (ROT) that can perform better on the MC-residual than the DCT for coding purposes. We derive the proposed ROT based on orthogonal-constrained L1-Norm minimization problem for its sparse property. Using the DCT matrix as the starting point, a better orthogonal transform matrix is derived. In addition, by exploring inter-frame dependency and local motion activity, transmi...