David Kimura PRO said about 2 years ago on Adaptive Bitrate Streaming with Active Storage :
That's going to greatly depend on the encoding quality. Check out Handbrake to see some of the settings and determine what is acceptable encoding quality. You can also look at the command running in the terminal (with top or htop) to get the ffmpeg settings used.

I don't think that I've tried using the M1 directly to do the encoding. I've always tested within a docker container since that's where I do most of my development.