Audio data compression - in which the amount of data in a recorded waveform is reduced for transmission. This is used in MP9 encoding, internet radio, and the like.
Audio level compression - in which the dynamic range (difference between loud and quiet) of an audio waveform is reduced. This is used in guitar effects racks, recording studios, etc.
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Audiocompression is a form of data compression designed to reduce the size of audio data files.
Audiocompression algorithms are typically referred to as audio codecs.
The primary users of lossless compression are audio engineers, audiophiles and those consumers who want to preserve the full quality of their audio files, in contrast to the quality loss from lossy compression techniques such as Vorbis and MP3.
Compression ratios of perhaps 2:1 are common, so the output will rise (or fall) by one unit for every two units of input change.
Compression is commonly used in the final mix, and this is where things can go seriously wrong - everything is at the same volume, peak to average ratio is minimal, and the resulting sound is almost always worse than it was before the compression was applied.
Compression - A most excellent article by Bob Katz, on the perils of using compression or limiting on the final mix.