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If your 16x9 TV had 0% overscan in either dimension (vertical or horizontal), then for a film with a 1.85 aspect ratio, you'd see very thin black bars at the top and bottom of the display area.
But if you have a small percentage of overscan (where you don't see the entire video display, but perhaps 95% of the video image), then a film with the 1.85 aspect ratio will seem to fill the entire 1.78 aspect ratio display area for a 16x9 TV. You'd be hard pressed to see the minimal black bars at the top and bottom of the display.
By having some overscan (i.e. 5%), imagine that the displayed video image is slightly stretched in the vertical dimension so that only 95% of the entire video image is displayed, which is probably just enough to shove the black bars out of the way from being displayed. And that gives the illusion that the 1.85 aspect ratio film fits just about perfectly within a 16x9 TV.
By having this amount of overscan in the horizontal dimension means that for a 1.85 aspect ratio film, you'd be missing just a bit of information on the sides of the display, but it's not all that earthshattering unless you have over 10% overscan or more.
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