I never thought I could fall in love so deeply with a $2,000 camcorder. I own and shoot with much more costly cameras that produce images with bit rates and color spaces far greater than that of the HMC40, but when you factor in price and quality, the HMC40 clearly leads the pack.

The Panasonic HMC40 weighs a little over 2 lb. and packs a wallop in that small package. It is based on a 3-CMOS (which Panasonic calls 3MOS) 1/4-inch imaging block recording AVCCAM, Panasonic’s implementation of Long GOP AVC H.264 MPEG-4 encoding. The CMOS imager allows this camera to capture a full-raster 1920x1080 image. When shot as a still camera, it boasts a 10.6-megapixel resolution.

Ever since the breakthrough DVX100 series, Panasonic has relied on Leica optics, and this camera is no exception, using a 12x Leica lens with optical image stabilization (which can be toggled on or off). A pop-out screen doubles as a touch screen for selecting menu options.

The HMC40 records 1080 60i, 1080 30p, 1080 24p (native), 720 60p, 720 30p and 720 24p (native) to Class 4 or greater SDHC cards. The Panasonic AVCCAM standard allows for recording at up to 21Mb/s and as low as 6Mb/s.

The basic camera kit includes a removable handle with shoe mount. With the handle removed, the camera looks just like a “toy” consumer camera. I have shot in some very politically sensitive areas around the world, and a camera like this would say “tourist,” not scream “pro.” There is a lot to be said for that. Panasonic offers an optional $500 XLR block with two XLR connectors with phantom power and line options.

Don’t be fooled by the small package and low price. This is a fully-featured camcorder which, within the confines of its imager size, can have numerous professional applications. First of all, with its similar electronics and identical codecs, it matches very well with Panasonic’s AG-HMC150 camcorder (the camera that at least I call “the new DVX100 of HD”). The HMC40 has provisions for up to two picture profile settings, and these can be interchanged with the HMC150 to match these cameras.

The HMC40 also includes HDMI out. This allows monitoring to external HDMI monitors as well as the ability to record a signal not compressed by the camera’s DSP to another source (capture card, recording device, etc). There is a component output for monitoring and USB 2.0 for file transfer.

AVCCAM is based on the very efficient H.264 standard. And as a true 1920x1080 codec, the quality of the images relative to file size makes it a very efficient codec. In testing at full 21Mb/s bit rate, a 32GB card can hold some three hours of footage. This standard codec is recognized by any NLE.

I edit in Final Cut Pro; in that system, AVCCAM footage (also called AVC HD) is brought in as ProRes, allowing editing in an I-frame timeline. Other NLEs will recognize this footage natively without any rewrapping or transcoding. Note again that we in the 4:2:0 realm with a small imager. If footage has extensive color grading and compression/decompression cycles, there is definitely the possibility of macro blocking and other image degradations. Understand and use it for what it is. If shot and used properly, footage from this camera is stunning.

Again, don’t be fooled by the small package. This is a fully-functioned camera. You can choose from fully automatic usage to manual usage. That would include manual focus, iris and white balance options. There are interval record options of 1 sec, 10 sec, 30 sec, 1 min and 2 min. Gain can be selected in steps from 0 to +24db. And while on the topic of gain, I must note that one cannot expect a camera with 1/4-inch imagers to be a low-light champion. And adding gain adds grain. This will be more apparent at lower bit rates. So, a gain of +24db is a nice statistic but something that would not be your most-used feature. The addition of slow shutter speeds can compensate for the low-light issues and is probably much more useful than extensive application of gain.

Another feature that many pros might not want to use, but which is present, is digital zoom. This is a 10x digital zoom option functional only in 1080 60i or 720 60p only. Nice to know that it is there and perhaps it could be useful. But also important to illustrate that Panasonic basically has not missed a single feature, even for such a reasonably priced item.

Most impressive are the gamma and matrix settings. Panasonic is well noted for its cine gammas, and this camera includes a cine gamma setting. It will then match well with any footage across the Panasonic line.

Shutter speeds are variable and syncro-shutter options are available. It can downconvert to SD within the camera through the AV output with selectable 16:9 or 4:3 aspect ratio and can crop, squeeze or letterbox as selected in menu.

And a waveform monitor in a $2,000 camera! No wonder you can hear my enthusiasm.

The HMC40 includes a “face detection” function for autofocus as well as the ability to touch the screen to set area of interest. These might not be quite as useful in the pro video setting. They certainly are great if the camera is set to still.

I took the HMC40 on a day’s outing to Manhattan, strolling with my wife around the Big Apple, capturing everything from curious squirrels in Madison Square Park (who saw it as an oversized peanut for them to nibble) to a street scene of funky cars featured in a documentary to be screened that weekend. It was wonderful to handle a small camera for a change and then to return to edit footage that compared favorably to much more costly devices.

There is yet another important niche for the HMC40 and that is in the education realm. I was speaking with several instructors in various budget-challenged university-level video programs and offered a strong recommendation for the HMC40. It offers the features and control that students will encounter in the larger pro cameras (even if the arrangement does not correspond to pro cameras). Learning to compose a shot, white balance, shoot to solid-state media, “paint” the camera, and set audio levels do not require highly-priced cameras; they require cameras with all of the professional functionality.

Like so many cameras now appearing, the CMOS chips of the HMC40 are subject to the flash-band and rolling shutter issues endemic to the technology. Flash and strobes are definite considerations when shooting with these cameras. Likewise, proper CMOS shooting techniques need to be followed—no whip pans, no sudden camera movements. Hold it still. Pan slowly. No radical movements. That’s what CMOS means, not only here but everywhere. To the credit of the fastest rate 21Mb/s codec, movement holds up very well when shot properly.

The HMC40 is well positioned as a learning camera, as a B-camera matching well across the Panasonic line and even as a primary camera for news, production and Web-destined video. It is fully featured and produces images of stunning color and depth to inexpensive SD cards. The codec is universally editable. Since it is H.264, original footage can be burned directly to Blu-ray. Nothing in this price range even comes close to the AG-HMC40. I recommend it with very visible enthusiasm.

Panasonic AG-HMC40
Street Price $1,995; optional XLR block $500 street price

Pros: Small form factor and full feature set. Full-raster 1920x1080 chips. AVCCAM codec and gamma/matrix settings match well with other Panasonic cameras

Cons: 1/4-inch imagers reduce low-light capability. Rolling shutter issues endemic with CMOS cameras. Touchscreen controls may some awkward to some who are used to menus.