The MPEG-1 encoding standard, which was widely used for 500MB movies, played a crucial role in achieving this compact file size. MPEG-1, developed by the Moving Picture Experts Group (MPEG), was designed to provide a good balance between video quality and file size. It achieved this by using lossy compression, which discarded some of the video data to reduce the file size. While this resulted in a lower video quality compared to modern standards, MPEG-1 was sufficient for the average user, and its widespread adoption helped to establish the 500MB movie as a viable format.