Best transcoding for AVCHD .MTS files taken with Lumix digital camera?

I have a point-and shoot camera that does 1080p hi-def video (Panasonic DMC-SZ7) --
It creates files in
/mnt/camera/PRIVATE/AVCHD/BDMV/STREAM
. For example:
% ls /mnt/camera/PRIVATE/AVCHD/BDMV/STREAM
total 3.8G
-rwx------ 1 asdf asdf 1.3G Aug 10 08:24 00000.MTS*
-rwx------ 1 asdf asdf 927M Aug 10 11:28 00001.MTS*
-rwx------ 1 asdf asdf 1.6G Aug 10 20:05 00002.MTS*
Here's the `mediainfo` dump for one of those files:
General
ID : 0 (0x0)
Complete name : 00000.MTS
Format : BDAV
Format/Info : Blu-ray Video
File size : 1.30 GiB
Duration : 11mn 12s
Overall bit rate mode : Variable
Overall bit rate : 16.6 Mbps
Maximum Overall bit rate : 18.0 Mbps
Video
ID : 4113 (0x1011)
Menu ID : 1 (0x1)
Format : AVC
Format/Info : Advanced Video Codec
Format profile : [email protected]
Format settings, CABAC : No
Format settings, ReFrames : 2 frames
Format settings, GOP : M=3, N=15
Codec ID : 27
Duration : 11mn 12s
Bit rate mode : Variable
Bit rate : 15.7 Mbps
Maximum bit rate : 16.2 Mbps
Width : 1 920 pixels
Height : 1 080 pixels
Display aspect ratio : 16:9
Frame rate : 29.970 fps
Color space : YUV
Chroma subsampling : 4:2:0
Bit depth : 8 bits
Scan type : Interlaced
Scan order : Top Field First
Bits/(Pixel*Frame) : 0.253
Stream size : 1.23 GiB (95%)
Audio
ID : 4352 (0x1100)
Menu ID : 1 (0x1)
Format : AC-3
Format/Info : Audio Coding 3
Mode extension : CM (complete main)
Format settings, Endianness : Big
Codec ID : 129
Duration : 11mn 12s
Bit rate mode : Constant
Bit rate : 192 Kbps
Channel(s) : 2 channels
Channel positions : Front: L R
Sampling rate : 48.0 KHz
Bit depth : 16 bits
Compression mode : Lossy
Stream size : 15.4 MiB (1%)
Text
ID : 4608 (0x1200)
Menu ID : 1 (0x1)
Format : PGS
Codec ID : 144
Duration : 11mn 11s
As you can see, 11 minutes of video at 30 FPS takes up just over 1.5GB.
My question: is there a more efficient encoding that would require less space but not lose much quality?
I have handbrake, ffmpeg, etc installed but I really don't understand this.

skottish wrote:I'm curious, at that big of a drop how's the quality?
Not discernably better or worse. Certianly acceptable for my purposes, no surprises.
skottish wrote:What's the output of mediainfo on the new file?
General
Unique ID : 215024101460296907370475472157250113814 (0xA1C422B52828C4B6AB74501A60E35116)
Complete name : 00000.mkv
Format : Matroska
Format version : Version 2
File size : 345 MiB
Duration : 11mn 12s
Overall bit rate : 4 309 Kbps
Writing application : Lavf55.12.100
Writing library : Lavf55.12.100
Video
ID : 1
Format : AVC
Format/Info : Advanced Video Codec
Format profile : [email protected]
Format settings, CABAC : Yes
Format settings, ReFrames : 4 frames
Codec ID : V_MPEG4/ISO/AVC
Duration : 11mn 12s
Bit rate : 4 031 Kbps
Width : 1 920 pixels
Height : 1 080 pixels
Display aspect ratio : 16:9
Frame rate mode : Constant
Frame rate : 29.970 fps
Color space : YUV
Chroma subsampling : 4:2:0
Bit depth : 8 bits
Scan type : Progressive
Bits/(Pixel*Frame) : 0.065
Stream size : 323 MiB (94%)
Writing library : x264 core 133 r2339 585324f
Encoding settings : cabac=1 / ref=3 / deblock=1:0:0 / analyse=0x3:0x113 / me=hex / subme=7 / psy=1 / psy_rd=1.00:0.00 / mixed_ref=1 / me_range=16 / chroma_me=1 / trellis=1 / 8x8dct=1 / cqm=0 / deadzone=21,11 / fast_pskip=1 / chroma_qp_offset=-2 / threads=12 / lookahead_threads=2 / sliced_threads=0 / nr=0 / decimate=1 / interlaced=0 / bluray_compat=0 / constrained_intra=0 / bframes=3 / b_pyramid=2 / b_adapt=1 / b_bias=0 / direct=1 / weightb=1 / open_gop=0 / weightp=2 / keyint=250 / keyint_min=25 / scenecut=40 / intra_refresh=0 / rc_lookahead=40 / rc=crf / mbtree=1 / crf=23.0 / qcomp=0.60 / qpmin=0 / qpmax=69 / qpstep=4 / ip_ratio=1.40 / aq=1:1.00
Default : Yes
Forced : No
Audio
ID : 2
Format : AC-3
Format/Info : Audio Coding 3
Mode extension : CM (complete main)
Format settings, Endianness : Big
Codec ID : A_AC3
Duration : 11mn 12s
Bit rate mode : Constant
Bit rate : 192 Kbps
Channel(s) : 2 channels
Channel positions : Front: L R
Sampling rate : 48.0 KHz
Bit depth : 16 bits
Compression mode : Lossy
Stream size : 15.4 MiB (4%)
Default : Yes
Forced : No
Text
ID : 3
Format : PGS
Codec ID : S_HDMV/PGS
Codec ID/Info : The same subtitle format used on BDs/HD-DVDs
Default : Yes
Forced : No

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