A study is made of differential PCM (D-PCM), which is a relatively simple but efficient coding system for TV signals. The purpose of this paper is to optimize the D-PCM system with special consideration of the visual property, that is, to obtain the optimum prediction coefficient and the optimum companding characteristics with consideration of the contract sensitivity used in D-PCM. It is found that when the visual property is considered, the optimum prediction coefficient

approaches 1.0 or complete integration (i.e., integration with an infinite leak time constant), although when the visual property is not considered, the optimum prediction coefficient

is the ratio of autocovariances, as we know from previous presentations.