The invention teaches a method of positioning a first image having a first image format into a second image comprising multiple image blocks and having a second image format. A straight boundary of at least one image block in the second image is identified. The first image is positioned into the second image by aligning an edge of the first image with the identified straight boundary. Alternatively, a block row or column of the first image can be aligned with the straight boundary but then in such a way that an edge of the first image parallel to the block row or column is aligned with a boundary of a row or column of image blocks in the second image. This image positioning reduces any bleeding artifacts and the number of bits required for representing the image during encoding.