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Music can be stored digitally in two different ways - either in a raw format or compressed to save space. These two formats are sometimes called lossless and lossy. The advantage of storing raw digital audio is that when it is played back, it is identical to the way it was originally captured, which means there will be no quality loss from storing the digital audio. The disadvantage of raw storage is it takes a significant amount of file space to store the music, not only requiring larger discs to store the raw music but also making it less portable. For this reason, unless pristine quality is required, normally only for studio recording applications or duplicating audio CDs, digital audio is normally compressed in some way to save space and make it easier to copy files onto portable medium and listen while you go. While compressing the audio into a smaller file clearly saves space and is more convenient for storage, saving 80% to 90% of the original file size, there is inherently some small quality loss that goes with it, although better compression routines can yield virtually identical results to the untrained ear.
There are a number of standard and proprietary formats that are used to store digital audio. The .wav format is the most common raw digital audio format and can be easily played under Windows and Apple computer systems without requiring any additional software. By far the most common compressed format for audio is MP3, which stands for MPEG (Motion Picture Export Group) layer III, and is also a convenient format to use because it can be natively played in most operating systems without additional software, and has become the de facto standard for digital music.
There are also a number of proprietary formats which are either platform specific or require additional media player software to be able to play back and listen to. Real Networks was an early pioneer in live streaming of audio content, and is still a common format for audio and video delivery that is more commonly used for live streaming, but can also be used for archiving and playing back of live music. Windows Media Audio is also a common format, primarily due to the fact that the software comes preinstalled on Microsoft systems, although it is not a broadly compatible format outside of the Microsoft environment. Sony has brought forward their Atrac proprietary format for compressed digital audio, which has some traction due to their large penetration into the consumer electronics world, however, the format has not taken hold outside of Sony products (such as Minidisc and Walkman players) and as a result, Sony has started to embrace a wider variety of digital audio formats. Apple's AAC format, a derivative of the more recent MPEG-4, which includes a more efficient audio compression format, also has digital rights management and has become a more common format due to the popularity of the iPod digital music player.
One common feature many of the newer proprietary formats have is the incorporation of digital rights management, which helps to restrict the use of the music by either limiting the number of times it can be played or the number of copies that can be made of it. This represents a current struggle that many leading music content providers are having as they balance trying to make their music libraries more broadly available to consumers through new channels, such as the Internet, while also trying to protect the rights of artists and record companies who want to make sure they are compensated for their product.
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