It is the preparation stage that connects a master file to the constraints of real devices and networks.
Why encode video
Source files are not always optimized for efficient playback or distribution. Encoding can change compression, bitrate, resolution and other media characteristics.
Quality is not one number
Codec, bitrate, resolution, frame rate and source complexity all interact. Avoid choosing an encoding setting only because a larger number looks better.
Galxy's rate
Galxy publishes encoding at $2.50 per encoded video hour. Exact supported formats and profiles should be taken from current product documentation.
Next step
If you are evaluating a platform rather than learning the concept, compare the operational workflow and the cost model together.