diff --git a/DOCS/encoding.rst b/DOCS/encoding.rst
index 46d6c8ae34..c82416dfa6 100644
--- a/DOCS/encoding.rst
+++ b/DOCS/encoding.rst
@@ -38,6 +38,11 @@ section::
   oac = aac
   oacopts-add = b=96k
 
+It's also possible to define default encoding options by putting them into
+the section named ``[encoding]``. (This behavior changed after mpv 0.3.x. In
+mpv 0.3.x, config options in the default section / no section were applied
+to encoding. This is not the case anymore.)
+
 One can then encode using this profile using the command::
 
   mpv infile -o outfile.mp4 -profile myencprofile
diff --git a/DOCS/man/en/encode.rst b/DOCS/man/en/encode.rst
index b0d5ca3808..f23467d823 100644
--- a/DOCS/man/en/encode.rst
+++ b/DOCS/man/en/encode.rst
@@ -3,7 +3,7 @@ ENCODING
 
 You can encode files from one format/codec to another using this facility.
 
-``-o <filename>``
+``--o=<filename>``
     Enables encoding mode and specifies the output file name.
 
 ``--of=<format>``
diff --git a/options/m_config.c b/options/m_config.c
index ac3ccc3640..59e8cb779e 100644
--- a/options/m_config.c
+++ b/options/m_config.c
@@ -758,6 +758,8 @@ struct m_profile *m_config_get_profile0(const struct m_config *config,
 
 struct m_profile *m_config_add_profile(struct m_config *config, char *name)
 {
+    if (!name || !name[0] || strcmp(name, "default") == 0)
+        return NULL; // never a real profile
     struct m_profile *p = m_config_get_profile0(config, name);
     if (p)
         return p;
diff --git a/options/options.c b/options/options.c
index 509e8a7e2b..646ebc490f 100644
--- a/options/options.c
+++ b/options/options.c
@@ -619,7 +619,7 @@ const m_option_t mp_opts[] = {
     OPT_PRINT("V", print_version),
 
 #if HAVE_ENCODING
-    OPT_STRING("o", encode_output.file, CONF_GLOBAL),
+    OPT_STRING("o", encode_output.file, CONF_GLOBAL | CONF_NOCFG | CONF_PRE_PARSE),
     OPT_STRING("of", encode_output.format, CONF_GLOBAL),
     OPT_STRINGLIST("ofopts*", encode_output.fopts, CONF_GLOBAL),
     OPT_FLOATRANGE("ofps", encode_output.fps, CONF_GLOBAL, 0.0, 1000000.0),
diff --git a/options/parse_configfile.c b/options/parse_configfile.c
index 184bc1769a..5418082d03 100644
--- a/options/parse_configfile.c
+++ b/options/parse_configfile.c
@@ -38,14 +38,13 @@
 /// Current include depth.
 static int recursion_depth = 0;
 
-/// Setup the \ref Config from a config file.
-/** \param config The config object.
- *  \param conffile Path to the config file.
- *  \param flags M_SETOPT_* bits
- *  \return 1 on sucess, -1 on error, 0 if file not accessible.
- */
+// Load options and profiles from from a config file.
+//  conffile: path to the config file
+//  initial_section: default section where to add normal options
+//  flags: M_SETOPT_* bits
+//  returns: 1 on sucess, -1 on error, 0 if file not accessible.
 int m_config_parse_config_file(m_config_t *config, const char *conffile,
-                               int flags)
+                               char *initial_section, int flags)
 {
 #define PRINT_LINENUM   MP_ERR(config, "%s:%d: ", conffile, line_num)
 #define MAX_LINE_LEN    10000
@@ -63,7 +62,7 @@ int m_config_parse_config_file(m_config_t *config, const char *conffile,
     int param_pos;      /* param pos */
     int ret = 1;
     int errors = 0;
-    m_profile_t *profile = NULL;
+    m_profile_t *profile = m_config_add_profile(config, initial_section);
 
     flags = flags | M_SETOPT_FROM_CONFIG_FILE;
 
@@ -132,10 +131,7 @@ int m_config_parse_config_file(m_config_t *config, const char *conffile,
         /* Profile declaration */
         if (opt_pos > 2 && opt[0] == '[' && opt[opt_pos - 1] == ']') {
             opt[opt_pos - 1] = '\0';
-            if (strcmp(opt + 1, "default"))
-                profile = m_config_add_profile(config, opt + 1);
-            else
-                profile = NULL;
+            profile = m_config_add_profile(config, opt + 1);
             continue;
         }
 
diff --git a/options/parse_configfile.h b/options/parse_configfile.h
index 65a4b49496..4a42cee001 100644
--- a/options/parse_configfile.h
+++ b/options/parse_configfile.h
@@ -22,6 +22,6 @@
 #include "m_config.h"
 
 int m_config_parse_config_file(m_config_t* config, const char *conffile,
-                               int flags);
+                               char *initial_section, int flags);
 
 #endif /* MPLAYER_PARSER_CFG_H */
diff --git a/player/configfiles.c b/player/configfiles.c
index 8ecb727389..bfa3c0ff22 100644
--- a/player/configfiles.c
+++ b/player/configfiles.c
@@ -44,6 +44,8 @@
 #include "core.h"
 #include "command.h"
 
+#define SECT_ENCODE "encoding"
+
 bool mp_parse_cfgfiles(struct MPContext *mpctx)
 {
     struct MPOpts *opts = mpctx->opts;
@@ -54,27 +56,38 @@ bool mp_parse_cfgfiles(struct MPContext *mpctx)
     void *tmp = talloc_new(NULL);
     bool r = true;
     char *conffile;
+    char *section = NULL;
+    bool encoding = opts->encode_output.file && *opts->encode_output.file;
+    // In encoding mode, we don't want to apply normal config options.
+    // So we "divert" normal options into a separate section, and the diverted
+    // section is never used - unless maybe it's explicitly referenced from an
+    // encoding profile.
+    if (encoding)
+        section = "playback-default";
 
     // The #if is a stupid hack to avoid errors if libavfilter is not available.
 #if HAVE_LIBAVFILTER && HAVE_ENCODING
     conffile = mp_find_config_file(tmp, mpctx->global, "encoding-profiles.conf");
     if (conffile && mp_path_exists(conffile))
-        m_config_parse_config_file(mpctx->mconfig, conffile, 0);
+        m_config_parse_config_file(mpctx->mconfig, conffile, SECT_ENCODE, 0);
 #endif
 
     conffile = mp_find_global_config_file(tmp, mpctx->global, "mpv.conf");
-    if (conffile && m_config_parse_config_file(conf, conffile, 0) < 0) {
+    if (conffile && m_config_parse_config_file(conf, conffile, section, 0) < 0) {
         r = false;
         goto done;
     }
     mp_mk_config_dir(mpctx->global, NULL);
     if (!(conffile = mp_find_user_config_file(tmp, mpctx->global, "config")))
         MP_ERR(mpctx, "mp_find_user_config_file(\"config\") problem\n");
-    else if (m_config_parse_config_file(conf, conffile, 0) < 0) {
+    else if (m_config_parse_config_file(conf, conffile, section, 0) < 0) {
         r = false;
         goto done;
     }
 
+    if (encoding)
+        m_config_set_profile(conf, m_config_add_profile(conf, SECT_ENCODE), 0);
+
 done:
     talloc_free(tmp);
     return r;
@@ -85,7 +98,7 @@ static int try_load_config(struct MPContext *mpctx, const char *file, int flags)
     if (!mp_path_exists(file))
         return 0;
     MP_INFO(mpctx, "Loading config '%s'\n", file);
-    m_config_parse_config_file(mpctx->mconfig, file, flags);
+    m_config_parse_config_file(mpctx->mconfig, file, NULL, flags);
     return 1;
 }
 
diff --git a/player/main.c b/player/main.c
index 506f6fccd9..0763fd69b8 100644
--- a/player/main.c
+++ b/player/main.c
@@ -300,7 +300,7 @@ static void osdep_preinit(int *p_argc, char ***p_argv)
 static int cfg_include(void *ctx, char *filename, int flags)
 {
     struct MPContext *mpctx = ctx;
-    return m_config_parse_config_file(mpctx->mconfig, filename, flags);
+    return m_config_parse_config_file(mpctx->mconfig, filename, NULL, flags);
 }
 
 struct MPContext *mp_create(void)