Color grading generating noise

I have color graded a clip to match a clip from a different camera. However, the color graded clip is throwing a lot of noise. See background area on right, in this short example.  www.filmsbytim.com/temp  

It has the noise reduction effect set to maximum (and sharpening set to none or low doesn't resolve). Ideas on how to fix, and why this occurred to start with?

Thanks everyone.

It's difficult to evaluate on Youtube since that is a re-encoded version of the uploaded file. How does the original ungraded camera file look when played back locally in Quicktime, and how does the graded exported file look when played locally? How does it look if exported as ProRes 422 and played locally?

On Youtube it appears to be "macro blocking" compression artifacts which are often seen on 8-bit H264 material, esp. if shot with a flat profile and graded in post. It can happen fairly easily with gradients such as the white wall, blue sky, etc.

It is more common if exported at a lower bit rate, which requires more compression. You could try exporting it using File>Share>Master File>Settings, Format: Computer, Video Codec: H.264 Better Quality, Resolution: either 4k or 1080p. If that doesn't help, as stated above try Format: Video & Audio, Video Codec: Apple ProRes 422.

It can be exacerbated by using noise reduction. Without NR, there is true "grainy type" noise, which tends to inhibit banding and macro blocking. With NR it's smoother but with only 8-bit material it can quickly go into banding or macro blocking after color grading and compression, and esp. after re-encoding by Youtube.

With 8-bit material there are only 255 possible tonal values for each color. If shooting with a flat profile like SLog2 or SLog3, these may be compressed to maybe 100 values. If the scene then contains a gradient such as a grey wall, white wall, blue sky, etc, there might be only 10-20 values to span the shallow tonal gradient. When the material is graded in post to pull back more contrast, it often causes banding and if encoded with a highly compressed codec like H264 it can show macro blocking.

If you can shoot 10-bit 4:2:2 material that often helps a lot. Even 10-bit 4:2:0 is a lot better than 8-bit 4:2:0.

If exporting to ProRes 422 looks better, you can upload that, assuming it's not too big. If it's too large, a workaround is export as ProRes 422 and use Handbrake to transcode to 10-bit HEVC. Doing that in FCP or Compressor on x86 is too slow due to lack of hardware acceleration. If on Apple Silicon it's fast.

Handbrake procedure:

- Export to ProRes 422 from FCP.

- If ProRes 422 file looks OK, proceed. If not, there is a bigger problem.

- Import ProRes 422 file to Handbrake.

- Use the Handbrake video encoder labeled "H.265 10-bit (x265)".

- In Handbrake Video tab, modify encoder preset slider: VeryFast, constant quality slider RF10. Do your own QC tests and adjust to taste. Start with small files and evaluate best combination of workflow performance and quality.

- Verify quality of local playback. If not OK, adjust Handbrake parameters and try again.

- Upload HEVC file to streaming service and evaluate playback quality. The HEVC file will be 10-bit 4:2:0, as I don't think any NLE or tool can currently export 10-bit 4:2:2 HEVC. However it should look better than an 8-bit H264 file.

We can close this ticket. Joema, your answer was super and will help me in future -- but for this one I applied a color mask to it, and set that back to original (ie, not color graded) - and there result is spot on for my needs.