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Recording the analog output has a lower quality than the original stream for 3 main reasons:

1. Marketing and psychology: Viewers want to believe they are viewing the original, not a degraded copy.

2. Unfaithful copy: Analog output and analog input introduce errors. LCDs use a variety of tricks to improve resolution such as spacial and temporal dithering. Also you can't use a normal camera to record a monitor because of aliasing (of pixels and non-genlocked frame rates).

3. Encoding noise. The encoding of the original is based on the higher quality original, and carefully optimised for the least visual artifacts. Any re-encoding also has to deal with noise introduced by the copying process, and with the noise introduced by the original encoding. This noise noticeably reduces the quality of a copy.




If anyone is wondering, this whole concept referred to as the analog hole. [1]

[1] https://en.wikipedia.org/wiki/Analog_hole




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