Justin from Zencoder here... I've been doing a bit of similar testing and seeing similar results. So they're obviously controlling the settings per frame (or per segment) during the encode, meaning the values in that encoder line are not very useful in analyzing what they're doing.

I'm definitely seeing a loss in quality on the "mini" encodes relative to the source -- mostly in loss of grain, and fine details (in hair, etc).

However, if they're analyzing the motion within the video and using perceptual algorithms to determine what the focal points are, etc. then it's totally fair to throw away details in sections that are peripheral, and likewise getting rid of grain in a blurred-out portion of the screen that's panning makes sense if your eye wouldn't perceive that anyway. This seems to be a much more aggressive version of x264's "psy" optimizations, essentially.

So the resulting video might look very similar in quality to someone watching the movie, but not to someone analyzing the frames and details. There's a hard line to draw on how that's marketed -- it's not actually "without losing quality", but it might be "without looking worse"?

Based on the comparing I've done on the second clip so far, they seem to be doing absolutely nothing special - at approximately the same bitrate and settings, the videos are practically identical quality-wise (in fact, the most recent x264 seems to fare a small bit better).

I'm going to do two sets of comparisons for each clip: Beamr's video compared to x264 with similar settings and bitrate, and then Beamr-like settings and high quality settings compared at a much more realistic bitrate that you would actually see in use in digital video on the internet.

I just came back to add that, encoding 2-pass to the same bitrate that theirs results at, I have a very hard time telling the difference. I look forward to your comparison sets.

I've finished my comparisons now. HN submission here: http://news.ycombinator.com/item?id=5289532