This paper proposes a perceptually optimized pre-processing technique using state of the art Human Visual System (HVS) model suitable for video compression to reduce bit-rate at the same quality. Visual masking models to accurately account HVS has been considered. Frequencies which are visually indistinguishable and need not be encoded are removed within visibility threshold. The scheme is optimized for multiple viewing distances to consider real-world scenarios. Extensive subjective and objective evaluation has been conducted to evaluate proposed pre-processing. Investigation shows significant bit-rate savings compared to a professional real time HEVC video encoder.