A novel video codec, the L-Shaped Morpho Codec (LSMC), based on Lifting Wavelet Transform, is proposed. The codec tracks significant pixels in sub-bands and applies morphological dilation using an L-shaped structuring element. Experimental results show that LSMC outperforms SPIHT and SPECK for both lossy and lossless compression, offering improved rate-distortion performance and requiring 0.13 bpp less than SPECK for lossless compression.