Advanced Audio Coding

Advanced Audio Coding, shortened to AAC, is a codec developed by several high-calibre audio companies &mdash; among them Dolby, Fraunhofer, AT&T, Sony, and Nokia &mdash; to act as a progressive improvement over the MP3 format. It was formally declared an international standard in 1997 by the Moving Pictures Experts Group.

It is a lossy format, meaning that some sound quality is lost in compression from native source to the resulting file. The order of loss is less than that of MP3, especially at the higher bitrates that more and more audio sources, such as Compact Discs, were able to produce, and as streaming audio technology improved. AAC gained most of its prominence from Apple when the company announced that the format would be centerpiece to its iPod product line and iTunes music service.

The format further enables a degree of controlled distribution, since FairPlay Digital Rights Management terms are applied to AAC-encoded files at the point of purchase.