An input HDR image may be represented using an SDR image and a modulation value. For the SDR image to be viewable and representative of the HDR image, we propose a mid-tone optimization technique to calculate the modulation value. In particular, we use two conditions when deriving the modulation value: (1) the blacks are not clipped down to zero too aggressively; and (2) the number of codewords in the SDR image used to represent the mid-tone range of the HDR image is maximized. The modulation value can further be clipped to avoid over-shooting in both very dark images and very bright images. Temporal stabilization can also be used to smooth temporal variations of the luminosity in the SDR video. After the modulation value is determined, the SDR image can be obtained based on the HDR image and the modulation value.