Entropy-based compression as presented in the previous chapter is an important foundation of many data formats for multimedia. However, as already pointed out, it often does not achieve the compression rates required for the transmission or storage of multimedia data in many applications. Because compression beyond entropy is not possible without losing information, that is exactly what we have to do: lose information.

Fortunately, unlike texts or computer programs, where a single lost bit can render the rest of the data useless, a flipped pixel or a missing sample in an audio file is hardly noticeable. Lossy compression leverages the fact that multimedia data can be gracefully degraded in quality by increasingly losing more information. This results in a very useful quality/cost trade-off: one might not lose any perceivable information and the cost (transmission time, memory space, etc.) is high; with a little bit of information loss, the cost decreases, and this can be continued to a point where almost no information is left and the perceptual quality is very bad. Lossless compression usually can compress multimedia by a factor of about 1.3: to 2:1. Lossy compression can go up to ratios of several hundreds to one (in the case of video compression). This is leveraged on any DVD or Blu-ray, in digital TV, or in Web sites that present consumer-produced videos. Without lossy compression, media consumption as observed today would not exist.