Lossy compression, which uses a range of psychoacoustic techniques to discard data without detrimentally attenuating the audio, can cause a perceptible reduction in audio quality ranging from none ("transparent") to severe. The data removed during lossy compression cannot be recovered through decompression.

This is not the case with lossless compression, which, due to the low cost and high availability of file storage/bandwidth is increasing in popularity, especially among audio engineers, musicians, audiophiles and consumers who want to archive identical copies of their audio.

Example formats:

• Lossy: ACC, MP3, MPC, OGG
• Lossless: FLAC, TAK, WavPack

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