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The practice of transcoding essentially converts the footage shot in your camera into another file format. This is typically done to make it easier for the computer to work with the footage during editing. Formats like H.264 are highly compressed, and as such, can require a lot of computer-processing power to decompress the files as they are transferred.
To improve performance, many pros transcode to a new file format optimized for video editing. This process often increases disk usage by six to ten times but reduces the load on the computer’s processors. Compressing footage often uses RAM or your computer’s graphics card. So, converting your footage up front by transcoding gets that step out of the way.