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You're right, at some point it visually looks better to downscale and have a lower rez but less artifacty video. The bitrate where this happens depends strongly on how compressible your content is. One way to judge this for x264 might be to look at the rate-factor. For 2-pass, the x264 output includes the rate-factor. For CRF mode, the CRF value you set ...

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