FLAC stands for Free Lossless Audio Codec, and it uses an algorithm which enables audio data to be compressed by around 50% without any loss in quality. Because of its blameless audio performance, its developers political stance as a free, open compression tool, its flexible metadata structure so that it can support cover art, fast seeking etc. as well as its support across all operating systems , FLAC is gaining great interest and support from the music community.
Pspatial Audio endorse FLAC quality and Stereo Lab accepts and outputs FLAC files (which you can encode from other types). See here for information about metadata with FLAC.
Unlike most of the other compression systems considered here, FLAC is a time-based compression system and uses a linear prediction model to predict the present audio sample from previous samples. Because music is not composed of random fluctuations, this prediction process is relatively successful. The basic principle of prediction is to calculate a best-guess value of the current sample from the preceding samples.
In stereo-mode FLAC also takes advantage of predicting right and difference (left-right) samples and coding these residuals which takes advantage of the inter-channel dependencies which exist in a normal stereo signal. Importantly however, this stereo compression process does not destroy important stereo cues in the way other compression algorithms do.
Sections of silence are detected within the FLAC algorithm and coded in RLE.
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