The way we hear is a complicated thing. Our brains automatically pick out the parts of a complex sound that are relevant. Certain sounds mask certain other sounds, but since that's the way we hear everything, we don't notice what's missing. Only bespectacled grad students with pocket protectors cared about this stuff until digital audio hit the scene. Now it's possible to analyze sounds and remove the parts we can't hear, saving a lot of bandwidth.

The process is called "perceptual coding" (or sometimes, less accurately, "digital compression"), and the various ways it's done are called "codecs," for code/decode systems. Generally, a codec can come in various bit rates — the amount of data stored in each second of a signal (128 kilobits per second is a common bit rate in digital audio). The higher the bit rate, the better the sound (but the greater the bandwidth needed). One of the first audio codecs was AC-3, which is used in Dolby Digital surround sound; perhaps the most familiar is MP3, used in a gazillion digital music players.
— Ian G. Masters

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