BD Ripper (3D Plus) mp4 somewhat Blocky colors

[justinhow]

Having pretty good results now when ripping a BluRay to h264/aac using ipad/1080p option. This makes a .mkv which I rename to be mp4 and works a treat on XBox, WHS etc.

Only slight problem is that in dark scenes you can often see blocky color issues. I do not believe this is resolved by using greater bit rate (I use 0.15 bits per pixel). Is this because it uses limited 8 bit color depth?

Any insight would be greatly appreciated.

[Complication]

This is directly related to both bitrate and the way dark areas are encoded. You will see it in some poorly encoded DVD releases too.