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It's easier to explain my question using an example. Imagine you filmed a few short videos and want to combine them together in a sequence (probably with transitions and etc.). However, for some of this videos you also want to apply some video stabilization, color corrections and so on. So, first you edit these videos one-by-one to apply some stabilization/corrections and render them (first encoding). Then you use these edited videos to make a sequence and render a resulting clip (second encoding).

Since most video encoding formats are lossy, it seems very inefficient to basically double-encode videos, so I'm wondering if there is any common approach for this issue (apart from using lossless compression formats).

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    Why render them as an intermediate step? I'm not sure about Blender, but most other NLEs let you nest one sequence into another without having to render. So you can do your edits and drag your edited sequences into the compilation sequence. – stib May 12 '15 at 2:59
  • Well, it seems to me that for some things in Blender (like video stabilization) it is not possible to include edited video in a sequence, and I have to render it first. – Oleg May 12 '15 at 11:26
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    Might be better to ask here: blender.stackexchange.com – p2or May 12 '15 at 15:41
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If you must encode at each step, use a lossless codec, or at least at a high bit rate and bit depth. But it's unusual and inefficient to perform intermediate encodings. A decent NLE will let you apply the needed transforms on separate segments or layers and only encode as a final step.

And note that rendering doesn't imply encoding in the final format. It may mean only performing some actions in the internal NLE format. If your layers can't be played out for preview because of hardware limitations, a render may permit that. But it doesn't commit you. You would still encode using the original elements in a final render.

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