Motion Compensated Temporal Filtering (MCTF) has proved to be an efficient coding tool in the design of open-loop scalable video codecs. In this paper we propose a MCTF video coding scheme based on lifting where the prediction step is implemented using PRISM (Power efficient, Robust, hIgh compression Syndromebased Multimedia coding), a video coding framework built on distributed source coding principles. We study the effect of integrating the update step at the encoder or at the decoder side. We show that the latter approach allows to improve the quality of the side information exploited during decoding. We present the analytical results obtained by modeling the video signal along the motion trajectories as an AR(1) process showing that the update step at the decoder allows to half the contribution of the quantization noise. We also include experimental results with real video data that demonstrate the potential of this approach when the video sequences are coded at low bitrates.