The "aspect ratio" of a film or TV show refers to the dimensions it is shown in. The 16x9 HDTV in your living has an aspect ratio of 1.78:1, for instance, while the square TV your parents had growing up had a 1.33:1 aspect ratio. If you go to a movie theater, most films you'll see are shot at 1.85:1. Sometimes they're more horizontal than that, clocking in at 2.39:1.
In other words: There are a number of different aspect ratios. And directors/cinematographers use these different aspect ratios to achieve different effects. If you wanted a film loaded with wide, expansive vistas—say, a prairie in a western or and endless expanse of desert—2.39:1 is your best bet. If you're shooting something a bit more personal, something with a lot of shots of couples sharing the frame, 1.85:1 may be better for you. Grand Budapest Hotel did something fascinating earlier this year when it used three different aspect ratios in the same film to demonstrate different time periods: 1.33, 1.85, and 2.39 are all in play at various points, and all help signify to the viewer which timeframe we are in.*
The point here is a simple one: Directors make artistic choices based on the aspect ratio that they are shooting in. They frame their shots and place their lights and arrange their sets in a very specific way depending on which aspect they're using. One of the reasons why film snobs were so excited by laserdisc and, later, DVD, was that these formats were typically offered in their native widescreen; at the very least, you were given a choice between a "widescreen" cut or a "full frame" cut.** Because they were watched on square TVs, viewing the widescreen cut meant there would be black bars at the top and bottom of the screen. It was an elegantly simple solution to a rather thorny artistic problem.
Unfortunately, normals hate those black bars. They feel they're getting cheated, that part of their TV is being "wasted" in a dumb artsy fartsy effort to maintain quaint notions like "artistic integrity." That hatred led to the rise of evils such as pan and scan, an artistic atrocity for which no one has yet been made to properly pay.
The prevalence of 16x9 TVs has more or less eliminated the need for pan and scan, thankfully. Virtually every film since the mid-1950s has been released in one widescreen format or another, so they fit nicely on your LCD, and the TVs are large enough that few get too worked up by the black bars still needed for 2.39:1 presentations. However, 16x9 TVs create their own problem: what to do with older TV shows, all of which were shot in 1.33:1? The solution, while not as grotesque as pan and scan, is similarly problematic: TV shows are now being "upgraded" so they can be presented in 1.78:1, thereby taking up every inch of space on your precious 16x9 TV.
How this is done is mildly complicated. But think of it this way: When a scene is shot with the intent of showing it at 1.33:1, there is, generally speaking, "information" on the original film to the left and right that is not used in the final product. So if you go back to that original film, you can trim the top of the frame and expand the width a little to achieve the desired 16x9 effect. If you've watched Seinfeld on TBS in HD or earlier seasons of The Simpsons on FXX, you've experienced this. HBO is planning to do the same thing to The Wire. David Simon explains the pros and cons of this process here, along with some clips, if you are interested in getting in the weeds. The only thing that really matters, though, is this:
The Wire was at its inception a bit of shoestring affair and expectations for the drama at HBO were certainly modest. Filming in letter-box was more expensive at the time, and we were told, despite Bob’s earnest appeals, that we should shoot the pilot and the ensuing season in 4:3.
At which point, Bob set about to work with 4:3 as the given. And while we were filming in 35mm and could have ostensibly "protected" ourselves by adopting wider shot composition in the event of some future change of heart by HBO, the problem with doing so is obvious: If you compose a shot for a wider 16:9 screen, then you are, by definition, failing to optimize the composition of the 4:3 image. Choose to serve one construct and at times you must impair the other.
In other words: aspect ratios matter, dangit. And if David Simon decided that HBO's fifth or sixth*** best show should be shot in the boxier, more-traditionally-TV-friendly 1.33:1, then in 1.33:1 it should be shown. Forever and always. Believe it or not, you can show a 1.33:1 program in glorious 1080p! My Blu-ray of Citizen Kane is really quite lovely, I assure you.****
The problem, of course, is that people are terrible. As I mentioned, they think that the black bars on their TV, whether they be horizontally oriented or vertically oriented are just "wasted space." They get antsy and agitated. And in their antsy agitation they become supportive of measures that are actively destructive to art. I'm with Matt Zoller Seitz on this:
Yes, am an absolutist about aspect ratio. However it was shot, that's how you should try to view it. Demanding it be cropped is arrogance.
— Matt Zoller Seitz (@mattzollerseitz) December 3, 2014
When I learn that somebody supports cropping films & TV to "fill up my screen" I gotta admit I think a bit less of them.
— Matt Zoller Seitz (@mattzollerseitz) December 3, 2014
Look, this isn't the end of the world. It's not life or death. But if you care about filmed art, it's important. And it's something you should be educated about so you can hector your family about it over Christmas ham.
*Some directors—including, occasionally, Stanley Kubrick—framed their shots to work on both TV and a widescreen theater. And there is, every once in a while, legitimate confusion about which aspect ratio a film was intended to be shown in; at that point, the best option is just to release all of the available ratios, as Criterion did with its amazing On the Waterfront set.
**True story: I accidentally bought Casino in full frame and didn't realize it until I started watching it. I literally stopped it two minutes in, went back to Circuit City, and bought the widescreen version. It was an important $20 lesson in reading the packaging fully.
***The Sopranos, Deadwood, Curb Your Enthusiasm, Band of Brothers, Carnivale, Rome, The Wire.
****If they try to pull this crap with Citizen Kane I will personally lead the riots myself.
IMPORTANT CORRECTION: I bought the Casino DVD mentioned above at a Circuit City and not a Radio Shack. I started thinking about defunct electronics retailers and my mind wandered.