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are there any recommendations for encoding an HLS stream to achieve playback/decoding with the least CPU usage / smoothest playback? I am using an HTML5/Flash player but the Flash player stutters with HLS around 720p, video bitrate 2-3k.

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This is more likely a function of the software renderer in flash rather than anything to do with HLS. Make sure Hardware acceleration is enable in the flash player, and make sure you are using stage video for rendering in your player.

szatmary
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  • Thanks for your answer. Do you know whether video.js (hls branch) and/or mediaelement.js use Stage Video in their Flash players? JW Player has a specific option to enable/disable it but I don't want to commit to the hefty Pro version (which plays HLS in Flash) if the open-source players do it too. – user3711766 Jun 07 '14 at 03:59
  • Not sure about video js. Sorry. You should be able to check the source, or ask the question here with the videojs tag. – szatmary Jun 07 '14 at 18:20