Using compressor with finalcutpro, Using compressor as a standalone application, Using quicktime reference movies – Apple Final Cut Pro 6 User Manual
Page 1764: Using compressor with final cut pro, P. 281)

Chapter 20
Using Compressor with Final Cut Pro
281
III
Using Compressor with Final Cut Pro
There are two ways you can use Compressor with Final Cut Pro:
 Using Compressor as a standalone application: Export a QuickTime movie from
Final Cut Pro and then submit the QuickTime movie to Compressor for encoding.
 Directly export from Final Cut Pro to Compressor: This option allows Final Cut Pro to
export content directly through Compressor.
Using Compressor as a Standalone Application
You can use Compressor as a standalone encoding application to submit QuickTime
movie files at any time, regardless of whether Final Cut Pro is launched.
Using QuickTime Reference Movies
To use Compressor as a standalone application, you need to create QuickTime movie
files to submit to Compressor. For example, suppose you are working on a one-hour
DV project in Final Cut Pro that you want to encode to MPEG-2 for DVD authoring.
Before you can use Compressor, you need to export the entire one-hour sequence to
a temporary QuickTime movie file which you can then submit to Compressor. This
temporary file takes a lot of unnecessary disk space, so an alternative is to export a
QuickTime reference movie.
QuickTime reference movies appear the same as standard QuickTime movies, but they
often take less disk space because the video track actually refers to your sequence’s
original media files when possible. The only time media is actually stored in a
QuickTime reference movie is during segments where rendering is required.
Compressor processes a QuickTime reference movie in the same way as a standalone
QuickTime movie that contains all of its media within its own video track. Exporting to
QuickTime movies always takes longer if rendering is required, but you still spare
Final Cut Pro from the time-consuming MPEG-2 compression phase.
When Should You Use Compressor as a Standalone Application?
If you want to continue using Final Cut Pro while Compressor is encoding, you can
export your Final Cut Pro clips and sequences to QuickTime movies and then submit
them to Compressor. The disadvantage of this method is that you must make an
intermediate copy of your movie. This requires extra time and, if you’re not careful,
the additional QuickTime processing step may cause some generational loss.
You can also use Compressor as a standalone application to transcode a source clip
from one standard or format to another before adding it to the Final Cut Pro
sequence. For example, if you want to convert a PAL clip to NTSC, you could this
directly in Compressor without involving Final Cut Pro.