This!

Mechner pioneered doing that from VHS when doing his game Prince of Persia.

Something like Bad Apple would be a heavy lift.

There are experiments with full motion digital video dating back to the 1970s. While computers certainly weren't fast enough to stream video data to or from memory (and you'd fill a supercomputer's entire RAM with 2 seconds of uncompressed video), video could be DAC'd in real time while streaming off digital tape, and vice versa. And such tape data could be read in, processed and written out by a computer (slowly...)

Still, while technically possible to do this sort of video compression in 1981, it would have involved extremely specialized hardware to scan the film in the first place, and a good amount of compute time on a real big machine like the Cray-1 to do the compression. (And Rick Astley wasn't a star yet, so what would have been the point?)

Fun fact though: just two years later, Cyndi Lauper's iconic music video was edited in digital form, including the insertion of computer-processed video effects: https://youtu.be/PIb6AZdTr-A?t=90 While such things as picture-in-picture are so common today we don't even notice it unless pointed out, that was mind-blowing at the time. But it took hardware worth a million dollars due to the megabytes of RAM required to fit the 10 second clips they worked with.