Normally, the camera uses the whole imaging sensor during video, and scales the output down to 1920x1080 pixels for the video stream. In ETC mode, though, it only uses the central 1920x1080 pixels of the sensor, giving an effective 2.4× crop factor, while retaining the full resolution, see the image below:
With the Panasonic GH2, the ETC crop factor was 2.6×. The reason for the difference is that the GH2 has an oversized, multi aspect sensor. The GH3 does not.
Let's say that you use the Lumix G 20mm f/1.7 pancake lens. When using ETC during video recording, it effectively becomes 48mm f/1.7, with 48mm = 20mm × 2.4. Which can be useful at times.
The ETC mode can be enabled in the video menu (left below), or by using the Q-menu (right below):
This feature is very good to have when you want to record videos at a long tele, and you don't have a long enough lens. However, since the camera has fewer pixels to use for making the video stream during ETC mode, one can guess that the quality will suffer. Unlike when using the full sensor, there is no possibility to scale down the image for better noise performance.
Comparison: Non-ETC video vs ETC video
To compare the non-ETC output with the ETC output of the GH3 camera, I recorded video sequences using the Lumix X 12-35mm f/2.8 lens at 35mm without ETC, and at 14mm with ETC. Both these two modes give approximately the same field of view, since 14mm multiplied with the ETC crop factor 2.4 gives approximately 35mm.
I used f/5.6 for the best sharpness. In both these modes, I used ISO values from 200 to 6400. I used the 25fps 1080p, ALL-INTRA mode for the best video quality.
Normally, one would of course not use the ETC mode with the Lumix X 12-35mm f/2.8 lens at 14mm. It would be better to just zoom the lens to 35mm. However, using this trick, I was able to compare the non-ETC and ETC modes using the same lens.
Here is a video summary of the comparison:
And here are 100% crops from the videos, for comparison. The normal non-ETC images are on the top, and the ones with ETC on the bottom:
We see that even at ISO6400, the non-ETC video footage holds up pretty well. It is a bit noisy, and the colours are not as good, but the video is still usable. With ETC, though, the quality degradation is much more severe.
The ETC mode is a very useful feature, but it is best used at low ISO. At higher ISO, the video quality will suffer. We also see that even at ISO 6400, the video quality is quite good with the normal, non-ETC mode.
We don't know exactly what algorithm the GH3 uses for scaling down the video stream from the full sensor to the 1920x1080 pixel output. It probably does not use every 11 million pixels of the sensor (in the 16:9 subsection of the sensor area), that would take too much processing power. But it is clear that it does use some averaging technique, to keep the noise down. In ETC mode, there is no scaling down, and hence, no noise reduction from using more pixels.
I've also compared the ETC video quality of the GH3 with the predecessor GH2. They seem to perform quite similarly, although I generally like the colours of the GH3 better.
When using ETC with a long lens, you can get an extreme tele reach. In the example below, I am using the Lumix G 100-300mm f/4-5.6 at 300mm, together with the ETC mode. This gives a very compressed perspective, due to the extreme tele effect.
You'll see the image wobbling. This is due to atmospheric disturbances, since the light travels through a lot of air before it reaches the camera. There is no way to avoid this, beyond, perhaps, getting up early in the morning while the air is cooler.
When using the Lumix G 100-300mm lens at 300mm, and with ETC, the effective equivalent focal length becomes 1500mm, which is a lot. Even when placing the camera on a tripod, I had to remove the first seconds of video footage while waiting for the camera and lens to settle down after pressing the shutter button.