It feels to me like there are two different things going on:
1. Video codecs like the denoise, compress, synthetic grain approach because their purpose is to get the perceptually-closest video to the original with a given number of bits. I think we should be happy to spend the bits on more perceptually useful information. Certainly I am happy with this.
2. Streaming services want to send as few bytes as they can get away with. So improvements like #1 tend to be spent on decreasing bytes while holding perceived quality constant rather than increasing perceived quality while holding bitrate constant.
I think one should focus on #2 and not be distracted by #1 which I think is largely orthogonal.
For #1 the problem with keeping grain in the compressed video is that it doesn't follow the motion of the scene so it makes it much more expensive to code future frames.
I disagree, because 1) complete denoising is simply impossible while preserving fine detail and 2) noise is a serious artistic choice—just like anamorphic flare, lens FOV with any distortion artifacts, chromatic aberration, etc. Even if it is synthetic film grain that is added in post, that has been somebody’s artful decision; removing it and simulating noise on the client butchers the work.
1. Video codecs like the denoise, compress, synthetic grain approach because their purpose is to get the perceptually-closest video to the original with a given number of bits. I think we should be happy to spend the bits on more perceptually useful information. Certainly I am happy with this.
2. Streaming services want to send as few bytes as they can get away with. So improvements like #1 tend to be spent on decreasing bytes while holding perceived quality constant rather than increasing perceived quality while holding bitrate constant.
I think one should focus on #2 and not be distracted by #1 which I think is largely orthogonal.