Adaptive perceptual mapping and signaling for video coding

A method is provided for encoding a digital video to improve perceptual quality. The method includes receiving a digital video at a video encoder, providing a perceptual quantizer function defined byP⁢Q⁡(L)=(c1+c2⁢Lm11+c3⁢Lm1)m2,wherein L is a luminance value, c1, c2, c3, and m1 are parameters with fixed values, and m2 is a parameter with a variable value, adapting the perceptual quantizer function by adjusting the value of the m2 parameter based on different luminance value ranges found within a coding level of the digital video, encoding the digital video into a bitstream using, in part, the perceptual quantizer function, transmitting the bitstream to a decoder, and transmitting the value of the m2 parameter to the decoder for each luminance value range in the coding level.