A codec is a device or computer program which encodes or decodes a digital data stream or signal.]

A coder encodes a data stream or a signal for transmission or storage, possibly in encrypted form, and the decoder function reverses the encoding for playback or editing. Codecs are used in videoconferencing, streaming media, and video editing applications.

There are two kinds of codecs; lossless, and lossy.

Lossless codecs, like PNG, reproduce the same exact file as the original upon decompression. Lossless codecs are intended for maintaining raw data during production workflow. Codecs like Quicktime ProRes 444 or 422 maintain a large file size that contains a high level of metadata to ensure a wide range of working assets and maintaining information from a source file. Lossless codecs allow users to work with data assets that are reversible and without data degradation.

Lossy codecs use approximations of data and partial data discarding to represent the content. These include codecs like jpeg, .mp3, h.264. The amount of data reduction possible using lossy compression is much higher than through lossless techniques.

It’s important to distinguish codecs from container formats, though sometimes they share the same name. Briefly, container formats, or wrappers, are file formats that can contain specific types of data, including audio, video, closed captioning text, and associated metadata. Though there are some general-purpose container formats, like QuickTime, most container formats target one aspect of the production and distribution pipeline.

The most widely used video format is H.264 or MPEG-4 Part 10, Advanced Video Coding (MPEG-4 AVC) For most online platforms, including Youtube, Vimeo, Netflix, and the iTunes store, H.264 is the recommended and preferred codec for compression. With a standard bitrate of 10mbs H.264 can maintain a high fidelity video resolution while simultaneously reducing the file size and distortion of the final video file.

Codecs have their qualities and drawbacks. The relationship between compression power, speed, and fidelity are usually considered the most important figure of technical merit.

The most important thing to consider while choosing a codec for your multimedia project is it's intended use.

If you are working in video editing and compositing source material from raw data you typically want to utilize a high bit rate codec like Apple ProRes 444 or a DNX. During editing, post-processing and compositing video and image files having all the raw data that is possible to work with will be beneficial for the final output file.

Generally, you would not move to a lossy codec until you are in the final stages of your multimedia workflow. Codecs like jpeg and H.264 are best utilized for the final output of a project when data storage, handling, and transmitting are high considerations.