This paper presents a method for lossy compression of digital video data by parametric line and Natural cubic spline approximation. The method estimates the variation of pixel values in the temporal dimension by taking group of pixels together as keyblocks and interpolating them in Euclidean space. Break and fit criterion is used to minimize the number of keyblocks required for encoding and decoding of approximated data. Each group of pixels at fixed spatial location is encoded/decoded independently. The proposed method can easily be incorporated in the existing video data compression techniques based on Discrete Cosine Transform or Wavelet Transform.