Quoted from PanzerFreak:
I think the 4K digital editions of Lord of the Rings and Hobbit extended trilogies are worth the upgrade over the Blu Ray's. The picture does look sharper versus the Blu Ray's but does lose some of the film grain look, almost as if digital noise reduction was applied. The color palette has also changed which I think makes the LOTR films look more vivid and not as washed out in some scenes. The big upgrade I like over the Blu Ray's is the additional of Dolby Vision HDR and Dolby Atmos. I recently setup a Dolby Atmos 5.2.1 setup in my basement and have been very impressed by it. It's also nice to never have to swap disks for the second half of the films and special features. The Lord of the Rings 4K trilogy was $25 on sale from Apple Movies and same with the Hobbit trilogy this past Christmas.
This all tracks with my expectations - the original LOTR trilogy was color timed chemically (aka old-school) and I know from standing there that the effects were only rendered in 1080p since that’s what “cutting edge theaters” could support (PJ wised up later on about that with Hobbit, shooting everything in 48fps, although he missed the resolution revolution). So the changes you note make perfect sense. I wanted to wait until summer for the big ultimatum OMGERRRD LOTR!! box set, but if I can find a good deal I’ll just go ahead now. Hell, I’ve bought these movies (and books!) about 10 times now between the EE and Rankin/Bass versions.