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#1 - does RMS normalization in WatchCat do any kind of processing to the files (in the traditional "audio processing" sense), or does it merely "turn up" or "turn down" the volume?
Hi. Normalization in Watchcat doesn't do any processing beyond attenuation. I prefer to normalize the output since it can do LUFS via EBU-R128, however. That's just my own preference.
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#2 - what is a good RMS level to shoot for so that I don't turn up and clip older, more dynamic material...I'm thinking -24 or perhaps even -26?
Good question. I guess it would be best to analyze your library and base your normalization target on that.
edit: I should mention that if you're normalizing the input, you can use the Advanced Clipper and prevent any distortion that would get added if you did normalize too loudly.