A method for dynamic scaling of content luminance and backlight level includes determining, using one or more processors of a display system, an ambient light level of a local environment proximate the display system. Based on the ambient light level being brighter than a first ambient light threshold, it is determined that the display system is in a normal room or a bright environment. A minimum viewable threshold representing a minimum pixel luminance value perceivable by a user in the ambient light level of the local environment is determined. The method further includes generating a modified display image by shifting the pixel luminance values of one or more pixels of an input image such that a darkest pixel value of the modified display image is equal to or greater than the minimum viewable threshold before transmitting the modified display image for display.