The Moving Pictures Experts Group (MPEG), which produced the MPEG-1 and MPEG-2 video and audio compression standards, is developing the MPEG-4 standard. MPEG-4 targets interactive multimedia applications and will become a standard in 1999. As well as an increased compression efficiency, MPEG-4 will also offer content-based functionality, i.e. the possibility of accessing and manipulating individual objects in the picture. Furthermore, MPEG-4 will offer possibilities for efficient video storage and for transmission over poor audio and video channels at bit rates between 5 kbit/s and 4 Mbit/s. This paper gives an overview of the state of the art of MPEG-4 development, concentrating especially on video content-based functionality, which is so ...