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I think they're saying that the base content _itself_ has the letterbox "burned in", so that when they watch it on their TV (with an wider ratio) it has black borders on all four sides - at the sides because of ratio mismatch, and at the top and bottom because they're present in the base media.

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This is correct. There’s a total black border on all 4 sides. Because the black bars are rendered into the top and bottom of the video. On a 1080p display it full screens fine but with a display with the native wide screen aspect of the actual video I can’t actually have it fill the screen.

But only on paramount+

This used to be a problem with VHS/DVDs when widescreen TVs first came out. TVs often (and maybe still do) had a mode to zoom in to cut them off.

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