Very Long Instruction Word (VLIW) processor architectures for multimedia applications are discussed from an algorithm, hardware and system based point of view. VLIW processors show high flexibility and processing power, as well as a good utilization of resources by compiler-generated code, but their exclusive exploitation of instruction level parallelism (ILP) decreases in efficiency as the degree of parallelism increases. This is mainly caused by characteristics of multimedia algorithms, increasing wiring delays, compiler restrictions, and a widening gap between on-chip processing speed and available bandwidth to external memory. As new multimedia applications and standards continue to evolve (MPEG-4), the demand for higher processing power will continue. Therefore, parallel processing in all its available forms will have to be exploited to achieve significant performance improvements. We show that, due to the diminishing returns from a further increase in ILP, multimedia applications will benefit more from an additional exploitation of parallelism at thread-level. We examine how simultaneous multithreading (SMT), a novel architectural approach combining VLIW techniques with parallel processing of threads, can efficiently be used to further increase performance of typical multimedia workloads.