High Dynamic Range (HDR) imaging is expected to become one of the technologies that could shape next generation of consumer digital photography. Manufacturers are rolling out cameras and displays capable of capturing and rendering HDR images. The popularity and full public adoption of HDR content is however hindered by the lack of standards in evaluation of quality, file formats, and compression, as well as large legacy base of Low Dynamic Range (LDR) displays that are unable to render HDR. To facilitate wide spread of HDR usage, the backward compatibility of HDR technology with commonly used legacy image storage, rendering, and compression is necessary. Although many tone-mapping algorithms were developed for generating viewable LDR images from HDR content, there is no consensus on which algorithm to use and under which conditions. This paper, via a series of subjective evaluations, demonstrates the dependency of perceived quality of the tone-mapped LDR images on environmental parameters and image content. Based on the results of subjective tests, it proposes to extend JPEG file format, as the most popular image format, in a backward compatible manner to also deal with HDR pictures. To this end, the paper provides an architecture to achieve such backward compatibility with JPEG and demonstrates efficiency of a simple implementation of this framework when compared to the state of the art HDR image compression.