Film term:

A method of creating a wide screen image with standard film, using a special lens on the camera and projector that compresses the width of the image that is exposed on the film and then expands it when projected.

Glossary of Film Terms - http://homepage.newschool.edu/~schlemoj/film_courses/glossary_of_film_terms/
reprinted with permission

These are the benefits of using the anamorphic process:

A nice, wide 2.35:1 frame is pretty to look at, and makes your movie look expensive. It is a nice production value.
The anamorphic process uses the entire frame of negative (all that width is vertically "squeezed" into the semi-square frame), thereby producing a sharper, more detailed image than one generated using 1.85:1 matting. Traditional 1.85 cinematography also exposes the entire frame, but relies on matting out the unwanted portions of the frame rather than using a special lensing technique. When a frame is matted to produce a 1.85 aspect ratio, all those nice, juicy grains of silver halide under the matte go to waste.
Anamorphic lenses have a very shallow depth of field. So, if you like that kind of thing anamorphic is your friend.

These are the drawbacks to shooting anamorphic:

You'll need a bigger lighting package. Anamorphic lenses are not as "fast" as standard lenses, so you're going to need more light to get a reasonable shooting stop.
Anamorphic lenses are large and heavy. Shooting anamorphic in confined spaces is difficult, and carrying the lenses around in the field is more of a chore.
Anamorphic lenses have a very shallow depth of field. So, if you don't like that kind of thing anamorphic is not your friend.

People who want a 2.35 frame but don't want to shoot anamorphic sometimes choose to shoot Super 35. Super 35, kind of like Super 16, has a slighty wider exposable area on the negative, because it only has perforations on one side and you can shoot into what would normally be the area for the optical soundtrack. Super 35 can be matted to 2.35, but, obviously, you lose all that resolution. Top Gun was shot Super 35, because it would be impossible to get a camera with an anamorphic lens into the cockpit of an F-14 Tomcat.

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