Why not use MPEG-2 instead of MPEG-1 in order to get a higher resolution?
Although we apply noise filtering, timebase correction, and other techniques to maximize the quality of the source material we encode, the overall quality of any encoding process is limited by the quality of the source material. Since most of the services we offer have to do with transferring VHS and other common “home use” tape formats, the most cost effective method to do that is by using the least expensive method of providing “VHS quality” encoding. MPEG-2 compression could be used to encode these types of videos but it would cost much more. Additionally, because of the limitations inherent in the source material, any gain in the quality of the video would be minor and may not even be noticeable.