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Terminology Description
Lossless

Data compression method that utilizes an algorithm that compacts data into a smaller sized data package and enables the identical restoration of original quality. This compression method is less common for digital audio and video because it yields greater file sizes. As digital preservation becomes more vital, the need for greater adoption of lossless compression methods for digital audio and video grows increasingly important. There are several “lossless” audio compression codecs  available including FLAC (Free Lossless Audio Codec) and the Apple Lossless Audio Codec (ALE/ALAC), however, at this time, most audio recorders do not include them as a recording option. This is not as important for digital audio since the file sizes for digital video are relatively small. Digital video, however, is in great need. One such standard that utilizes lossless compression in the JPEG2000 lossless format wrapped in a MXF container. Lossless compression is attractive from a long-term preservation standpoint as it decreases data sizes without degrading quality.

Lossy

Data compression method that utilizes an algorithm that compacts data into a smaller sized data package. This compression method is  common for digital audio and video because it yields much smaller file sizes. This method inherently degrades the original quality. Certain compression codecs such as H.264 and MPEG-3 have become quite efficient enabling much smaller file sizes with a lower perception of loss be it audible or visual. Traditionally, lossy compression has been ideal in an access environment because of the small file sizes. However, because of the degradation in quality that results from lossy compression, it is not ideal in a preservation environment. Lossy compression is not recommended for recording or preserving digital audio, but is difficult to avoid for digital video, even in a preservation environment.