Statistical multiplexing has several advantages over fixed rate multiplexing. If, instead of multiplexing several fixed rate services, each service is allowed to vary its output bit rate then a situation occurs where the encoder of each service can use only the bit rate that it needs to achieve the given quality, then a situation occurs where most of the time a total bit rate much less than the addition of all the peak bit rates is achieved.
This is because the variable bit rate encoders will rarely have the maximum scene complexity simultaneously and therefore will not all peak at the same time. By analysing the scenes and hence the individual service demands utilising 2 pass encoding, a statistical multiplex system will assign priorities and bit rates dynamically on the basis of the source material. The central management system allocates the final pass encoding bit rate based upon the initial pass scene complexity requirements and the total output bit rate of the system is kept within the set tolerances.
A statistical system with a large number of channels, with diverse material and timing will have a large bit advantage over a fixed rate system, and can offer efficiencies of up to three times that of a fixed rate system.