“I could imagine a scenario where Bilbo says that line, then hard cutting to him hiding behind some rocks as he hears animal howling. It would be pretty funny moment if it were only cut different.”

This is actually what I originally did in my first version of this edit. It was funny, because it was almost a “match cut” of Bilbo’s face, saying the worst is behind us, then boom he’s scouting and the danger is right back.

The issue was that I felt without a cut to black screen/intermission it felt too sudden for the drastic change in time & setting. On top of that, it didn’t really establish that the Orc pack was still after them (it was missing those 2 establishing shots of the orc pack), because we only saw Bilbo’s face, then Bilbo see’s Beorn, then he runs to the company.

So at the moment now it looks as if we have but 3 options:

Keep it the same, says “continues on part two” (to mirror the experience while watching LOTR EE)
Keep it the same, but it says “Intermission” instead (because that’s what it really is)
Have no intermission, this would be similar to the test clip I posted but with a few adjustments - I’ve made the black screen slightly longer and the fade slightly slower but there’s not much I can really do. I think the idea of the warg/wolf SFX is good but I can’t really find any clips that sound good to put there.

I think I’ve ruled out my original way where it just went straight from Bilbo to Bilbo even if it was a bit more comedic, that’s about the only thing it has going for it. Anyways, the disc version is where it’s at - full special features, higher bitrate, and of course, the insert next disc screen would make perfect sense, it’s really just a question of what I do for the digital version, so I’m not even that attached to any method, just whatever works best and most agree on.