The latest x264 can get away with about 800-1000kbps average bitrate for nearly-perfect rips of a DVD (and down to as low as 300-500kbps if you're willing to lose the film grain). Most web services are worse--since they don't use x264 (a large number still use ancient formats like FLV...). There are some exceptions: Vudu, for example, uses x264 and is able to get tolerable quality 1080p in 2.8mbps. But I personally wouldn't bother with that--at 2.8mbps your 1080p certainly won't have any more detail than 720p. Of course, most people don't notice this because most Blu-rays don't have more detail than 720p either.
Note that DVDs themselves are already highly lossy; most DVDs have been lowpassed before encoding, so they have significantly less detail than their resolution would suggest. This is rather unfortunate, as the tradition has stuck with Blu-ray, despite it being completely counterproductive when using a good H.264 encoder.
Broadcast is an even worse situation; most broadcast television is atrocious quality-wise. This is usually because of outdated technology (MPEG-2), highly-lossy transcoding to save bandwidth (Comcast is a huge offender here), or just plain absurd bandwidth restrictions (a major television station in Japan uses 4mbps H.264 for 1080i). Of course, this is all aggravated by the requirement of constant bitrate and short keyframe intervals for broadcast streams.
> Note that DVDs themselves are already highly lossy; most DVDs have been lowpassed before encoding, so they have significantly less detail than their resolution would suggest. This is rather unfortunate, as the tradition has stuck with Blu-ray, despite it being completely counterproductive when using a good H.264 encoder.
Could you explain what you mean by "lowpassed"?
Any idea what keeps the adoption of modern x264 codecs? Are they expensive to license? Is it just inertia?
You just made me wonder how good things would look if they did it right... Do you think it would make a big difference to the untrained eye (you sound like someone in the video business)?
Lowpassing means performing a frequency transform and removing the highest-frequency coefficients. It has a similar effect to taking an image, downscaling it, and then upscaling it again (except without the aliasing that the latter produces). Wikipedia probably has more information.
You can tell the difference yourself easily: get a DVD and Blu-ray version of the same movie and downscale the Blu-ray to DVD resolution. You'll notice the Blu-ray is still a lot sharper and has more detail.
Also, note that x264 is not H.264. H.264 is an international video standard published by the United Nations; x264 is a particular open-source implementation developed by Loren Merritt, me, and a few others. Not all H.264 encoders are very good, in fact, a lot are quite bad. See http://x264dev.multimedia.cx/?p=102 for a comparison I did a bit back and http://x264dev.multimedia.cx/?p=164 for some technical information on why.
The reason that adoption of newer video formats has been slow, at least on the internet, is primarily that there is a huge (server-side) install base of old technology that would take effort and expertise to convert to use new technology. It wouldn't be expensive--in fact, it would save billions of dollars a year in bandwidth--but inertia is a powerful force, as is simple lack of knowledge and awareness. Of course, many sites have already converted over; Youtube and Facebook now both use x264 for most of their videos.
One more question; do you know if the movies we see on TV have been encoded from a "master" provided by the studios or something like that, or if it's a re-compression of something like a Bluray or a DVD..?
Usually it's from a master. But the quality loss due to broadcast compression is great enough that the difference between a master and Blu-ray source would hardly be visible.
HDTV is usually better than a DVD though if it's a premium channel from a good provider.
Note that DVDs themselves are already highly lossy; most DVDs have been lowpassed before encoding, so they have significantly less detail than their resolution would suggest. This is rather unfortunate, as the tradition has stuck with Blu-ray, despite it being completely counterproductive when using a good H.264 encoder.
Broadcast is an even worse situation; most broadcast television is atrocious quality-wise. This is usually because of outdated technology (MPEG-2), highly-lossy transcoding to save bandwidth (Comcast is a huge offender here), or just plain absurd bandwidth restrictions (a major television station in Japan uses 4mbps H.264 for 1080i). Of course, this is all aggravated by the requirement of constant bitrate and short keyframe intervals for broadcast streams.