First off, loving the media optimizer in plex. I’ve found myself using it more and more, especially in conjunction with dynamic playlists. Great stuff.
I am moving my content stored locally to HEVC from H264, and have found that most of my connected devices / users now have HEVC direct-stream capable devices, which is great news! And my system is capable of running the same amount of transcodes HEVC->H264 as HEVC->HEVC if needed.
Some points
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The quality settings in Plex should properly support HEVC as a destination transcode codec. Even if this option is hidden from the end user. An option to enable in the server -> transcode settings would be great, with an option to allow only for hardware encoding would be even better.
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If the stream is being viewed, and needs transcoding, the plex client playing back the content should detect that HEVC is a valid stream, and use that for any on-the-fly transcoding. This should be used even if the source codec is not HEVC, this massively saves on upstream bandwidth.
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When choosing the quality of a stream currently being played Plex thinks that a low bit rate, high resolution HEVC file can only be transcoded to much lower resolution. For example 1080p HEVC can only be transcoded to 480p or lower H264, I assume based on the source video bit rate, not the frame size or codec used.
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Ideally all clients should support automatic quality based on bandwidth, server load, etc, and just factor HEVC in to the mix - I know this isn’t possible or easy, but this would be the ideal goal if time and effort were limitless.
hope this makes sense,
jrb