I realize this question may just be dependent on my video source, I'm just looking for some general guidance here as I havent done much work with HD video.
I have a 1080p MKV bluray rip that is 11 or so MB/s, and I want to shrink it down to fit on a DVD-R, which means 5800kb/s.
My question is, for best quality at that bitrate, should I downscale it to 720p, or keep 1080p?
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I would use 720p.
But why not make a ten minute sample or so and see how it looks like. Make a sample from the video that contains lots of motions and details.
720p has 921600 pixels per frame, which means that you could create a 720p movie, with roughly the same per pixel quality, by going as far down as 4.6 mb/s, assuming you use an equivalent quality codec as the source. thus 5.8 mb/s will be more than enough to maintain comparable image quality, sans the resolution, of course.
the above calculations obviously change if the frame rate is something like 29.97 or 30 fps.
If the source is 1080p, then the best quality will be 1080p. What matters is your display device. At normal viewing distances, if the display is 50" or greater, then stay with 1080p. If the display is smaller, then the resolution loss of down conversion to 720p may not be objectionable.
At 5800 kbps it's likely it will look better at 720p. Unless it's a slideshow.