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CREDIT: The following and the picture is a good description of Optical vs. Digital Zoom taken from the 2M CCTV site and it's author Ted Thomason;
Optical vs. Digital Zoom
Unwary buyers of surveillance cameras are sometimes unaware of terms in the industry. Being caught without knowledge of the salesperson’s jargon can mean that you won’t get what you think you’re getting for the money.
One such term is zoom. Pan-Tilt-Zoom (PTZ) cameras and some fixed cameras have lenses that zoom in on an object. In other words, it magnifies the object of the video, such as a car in a parking lot, so that it can be seen in much better detail.
Zoom is a very important feature of video camera lenses. By making the image larger, it is possible to watch intrusions developing from some distance away from the doors to a building.
In a secure parking lot, for example, if someone bypasses the guard shack, a zoom camera mounted on the side of a building over a hundred feet away should be able to capture easily the progression of the automobile as it gets closer to the building. This gives time for a security guard to respond before the intruder is leaning over his shoulder with a gun pointed to his head.
This may seem to be an extreme example, but it is one of the things that separates zoom cameras from fixed ones.
When comparing the zoom features of a camera lens, it is absolutely critical to understand the difference between digital zoom and optical zoom.
Imagine that you are looking at a Rembrandt in a museum, and you want to get closer to a beautiful pastoral scene to see the master’s details of a country hillside.
Since the guard is paying attention, you have to settle for taking a regular picture of the Rembrandt from a safe distance away. Then, you have the picture developed and you now hold in your hand the photo you took at the museum.
You have an idea. Now that you have the picture in hand, you decide to get someone to blow up the picture on a copier so that you can see the hillside better. At least, that’s what you think you’re going to get.
When you blow the picture up to the same size of the full original painting, you are disappointed. Now, it just looks like a bad case of psoriasis and you have missed an opportunity to bring Rembrandt home with you.
Digital zoom is very similar to this. It cuts out a section on a distant image, not actually getting you closer to the object but by magnifying the lack of clarity that already exists. In other words, if you can’t tell what the details are from a distance, you won’t be able to tell what they are by making it seem closer by digitally manipulating the captured picture.
Digital zoom, while not exactly useless, does not actually help very much when you need to focus on an object as if you are standing much closer to it.
Put yourself back in the art museum for a moment. You are standing in front of the Rembrandt and you really want to get closer to it so you can see the finer details of the hillside. This time, you don’t have a camera. Instead, the sleepy-faced guard has his head turned, and you jump over the barriers and put your eyes about six inches away from the painting.
Suddenly, all the details of the hillside are shown. You see the individual blades of grass, the lines on the outer edges which distinguish an object from its background. You can see it clearly, and your awe of Rembrandt grows to new heights.
Optical zoom is like standing closer to the object.
In our opening example about the car crashing the guard shack, it would be as if the security guard is only a few feet away from the automobile, allowing him to head off the intruder before he reaches the front door.
The value of optical zoom in video surveillance is priceless. While it is not quite as good as you will see on television cop shows, it is still a great tool for keeping an eye on your property.