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Foibbles said:

1. The bluray "standard" has strict settings for things like maximum reference frames, minimum bitrate (i.e even a black screen has a certain bitrate that it doesn't need), keyframe distance, GOP frames...(do a search on google you will find out a lot). In all honesty it's over my head explaining the technical points. If you think about it this makes sense, the "standard" has to be set at some point in time and from that point no new featuresadvancements can be added because it would break compatibility with exisiting players. It's the same for the piracy scene. There are standards for "xvid", "divx456" and so on. They can make small tweaks to the encodes but only within a very strict boundry, you certainly won't be seeeing any massive improvements in compression once that "standard" has been agreed upon.

2. On the side of VC1 being more efficient at low bitrates - this is somewhat a myth technically and maybe I shouldn't have put it as bluntly as that. However the end result is true in that the tools for encoding using VC1 are far more user friendly and allow optimising by handvisually by the encoder to add extra bitrate where artifacts would still be present and take it away where needed. This is how the movie studios in the day of HDDVD could achieve equal results to bluray at a much lower bitrate. Don't get me wrong as far as I'm concerned for the end user VC1 is a complete pile of shit. It's very inefficient because those tools aren't available to the end user. h264 will give very good results straight off the bat. But we're talking about professional encodes here and at low bitrates with the man hours that go into each encode since they are "for profit" you get results that are shockingly good at bitrates you wouldn't think possible.

3. On point 7, this is actually true VC1 does deal with grain better. I haven't read up on it much recently but I believe there are settings within the codec to actually look for grain and treat it as such and not treat it as "noise" as h264 does.

4. On the subject of source material with less noise (i.e newer stuff). I'm referring to that because this is generally the stuff that will be most popular on the service. I will say right now, stuff that is from the 70s80s will NEVER look anywhere near as good as bluray on this streaming service. But at the end of the day I don't think many people will be using the service for that.

Thank you for a serious answer. I should probably make clear that I wasn't rally trying to slag of MS in my post :)

1: Makes sense. I think this might be necessary for a .ts, but I could be wrong.

2: So, encoding tools. I don't know anything about professional-level tools for either format... Early blu-rays used MPEG-2 for compression, and consequently looked like shit.

3: I have read about this in relation to encoders overdoing some noise-removal settings for h.264. I'll probably have to find a proper article about it...

4: Yeah, absolutely. I was thinking more of the recent trend to add noise to movies during post-production. Like, say, recent James Bond or Batman movies.

 

I do think that the video service will look good, the question is more "will it look 6$ per movie-good?".