The best balance between video quality and file size is typically achieved with modern compression formats like HEVC (H.265) or AV1. HEVC offers significant efficiency, reducing file sizes by up to 50% compared to older standards like H.264 while maintaining similar or better visual quality. It achieves this through advanced techniques like improved motion compensation and better prediction algorithms. AV1, an open royalty-free format, provides comparable or superior compression efficiency to HEVC, especially for high resolutions.

In practice, HEVC is widely used for 4K UHD Blu-rays, high-quality video streaming from services like Netflix, and efficient video capture on modern smartphones like iPhones. AV1 is increasingly adopted by streaming platforms such as YouTube and Netflix for delivering high-resolution content with lower bandwidth requirements, and by platforms like Twitch for efficient live streaming at scale.

These formats offer substantial bandwidth and storage savings, but have trade-offs. HEVC requires more processing power for playback and encoding, potentially limiting compatibility with older devices, and involves patent licensing. AV1 provides excellent royalty-free compression but demands significant computational resources for encoding. Both are pushing innovation in video delivery, enabling higher resolutions and immersive experiences like VR more accessibly. Ongoing development focuses on improving encoding speed and hardware support to enhance adoption.