A method for processing High Dynamic Range (HDR) video in order to improve the perceived visual quality of encoded content. An encoder receives an original image, wherein a contrast analysis is performed on said original image in order to highlight potential problematic areas. The original image is reduced to a decreased bit depth image in order to compute a predicted image, wherein the predicted image is then magnified to an increased bit depth image. A residual image is then computed from the original image and the increased bit depth image, and the residual image is transformed into a frequency signal. Quantized coefficients determined through the contrast analysis are then applied to the frequency signal to produce a reduced frequency signal. The encoder then inserts high-frequency components into the reduced frequency signal before encoding a compressed image from the reduced frequency image and the predicted image.