Overall Findings
The receiver decodes the audio.
Potential for higher quality audio.
Limited secondary audio quality.
Lifewire
5.1 support over digital optical or coaxial.
The Blu-ray player decodes the audio.
Better for secondary audio channels.
Limited digital optical or coaxial output.
However, here is what happens when you choose either setting.
Signal Decoding
The home receiver decodes the audio, expanding quality options.
Higher quality sound is possible if the receiver supports it.
Transmits standard 5.1 surround signal to receiver.
The Blu-ray player decodes the signal, providing quick transfer.
Then, it sends the decoded audio signal in an uncompressed form to the home theater receiver.
Receiver Quality Importance
Overall, a higher-quality receiver is recommended.
The receiver does most of the work.
Bitstream is a better choice for digital or coaxial outputs when HDMI isn’t available.
Demands less of the receiver.
Better quality on secondary audio tracks.
The player decodes the audio without bandwidth concern, which is an issue for bitstream.
Suppose you select bitstream as the HDMI audio output setting for a Blu-ray player.
The home theater receiver does the audio decoding of the incoming signal.
No Blu-ray Disc players can decode these formats internally to PCM and pass that to a home theater receiver.
In this case, the home theater receiver recognizes the signal as standard Dolby Digital and decodes appropriately.
HDMI is easily the best option for output.
However, if you use eitherdigital or optical coaxial outputs, bitstream is the clear winner.
Digital optical and coaxial connections suffer from limited bandwidth and can’t transfer a fully processed and decoded signal.
Because bitstream relies on the receiver for decoding, it’s ideal for limited bandwidth situations.
More often than not, you’ll want bitstream.
The potential for better audio quality and the flexibility to use coaxial outputs puts it ahead of PCM.
The only situation where PCM comes out on top is when using secondary audio streams.
