Data Compression

Data compression is 'the process of encoding information using fewer bits'. This results in the file being compressed (or shrunk down) to a smaller size. This is useful as it reduces hard disk space, or bandwidth (if used online). The disadvantage of this is that the 'compressed file data must be decompressed to be view or heard,' and require extra processing. This means that to decompress a file, an expensive piece of software may have to be used to decompress data 'fast enough to be viewed'. There must be sufficient storage space for the decompressed video to be stored.
There are two types of compression, lossless and lossy compression. Lossless is where the file is kept exactly the same after compression, and lossy is where a tiny bit of data is changed but not noticed the the user. Lossless data is reversible as it is 100% exactly the same, so original data can be reconstructed but since a small change is made for lossy data then it makes the task of reconstructing original data much harder.
Lossless data is data is benefitial to businesses as their work in spreadsheets, text, programs etc cannot be changed even a single bit and must not be tolerated.
Lossy data can be used in digital cameras to increase their storage space, and keeping almost a perfect quality.
In the end, unless it is really necessary not to change the data for certain reasons, there is not much difference in the end. In my opinion, I would prefer to use Lossless data, as it is 100% exactly the same as original data, even though it may need more expensive software to do this. It is better in a sense, as it can converted back to the original data, if needed to, whilst lossy cannot do this, making it harder to work with. Although lossy data does produce data that is a smaller file size, as detail is removed, but if nobody notices it, then lossy data is successful.They are both benefital in their own ways.
SOURCE: Data Compression (hand-out). Retrieved 23rd November 2008.