The most important difference between audio file formats is the type of compression (that’s data compression – not to be confused with audio level compression, which you can review in our article Should You Use Compression In Audio Recording? if you’d like). There are uncompressed formats (.wav, .aiff), lossless compressed formats (.flac), and lossy compressed formats (.mp3, .wma). As you might guess, uncompressed formats are in their original size and quality. These formats are best for recording, but due to their larger size, may not be appropriate for distribution. Lossless formats compress the size of the file without losing any of the quality, and lossy formats compress size with some loss of quality. Knowing the key differences between the formats can help you to choose the right file type for each step in your production process.
Get a review on the mp3 format from my article What Is An MP3?
You can read the article describing the other formats here: http://www.audio-issues.com/home-recording-studio/demystifying-audio-formats-what-format-should-you-record-in/
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