Although MP3 is the most popular format for encoding music, it is by no means the only one. There are two basic methods for compressing audio – lossless and lossy, and for each of these methods there are many formats.

Lossless compression means that none of the audio data is removed during compression. Lossy compression means that audio data is permanently removed from the audio file. Lossy compression results in smaller files, but there is no way to rebuild the audio data to its original format. MP3 is an example of lossy compression.

Lossy Compression Formats

There are many alternatives to MP3 when it comes to encoding audio files. Microsoft reportedly developed the WMA format to avoid the licensing costs associated with MP3. WMA files can be played with the Windows Media Player that is included with the Windows operating system as well as many other audio players. It features similar encoding rates to MP3 and similar file sizes.

AAC (Advanced Audio Coding) is the format preferred by Apple and is used for its popular iTunes and iPod products. AAC files can be smaller than MP3 files because it uses more efficient encoding technology. A 96 kpbs AAC file is similar in sound quality to a 128 kbps MP3 file.

Ogg Vorbis is another type of lossy compression and uses .OGG as the file extension. It is an open-source product and unlike MP3, there are no patent restrictions on its use.

Lossless Compression

For the audio purist who insists on the best quality sound possible, lossless compression offers CD quality sound. The tradeoff is larger files sizes – while MP3 can compress audio in the range of 80% - 90%, lossless compression typically compresses the file by half.

Popular lossless formats include FLAC, Monkey’s Audio, and SHN (Shorten). These formats are supported by many audio players and are popular for archiving CD collections as well as for trading music.