Hey guys…I just figured out how to overcome the error.
Once you have imported file into timeline.
go to
File>Edit Quality presets
It will take you to the quality preset window.
choose any format you like..MPEG Blu ray or H.264 etc.
Then scroll down to bitrate settings.
I always use CBR, but you can use VBR, 1 Pass or VBR, 2 Pass.
once you select the bitrate encoding.
Adjust the minimum, for VBR > target and maximum bitrate setting.
For CBR, the default is set at 30mbps…bring that down.
It seems that encore uses very high setting for transcoding.
For example: if you have a mpeg blu ray file which is 12gig…once you import it in encore and add to time line. it will show the total size for the project is 26gig….this is because of the Quality presets.
Conclusion: import files to encore and then adjust the quality preset and you will be able to adjust the size of your project.
Take care.