Lossy Compression - (Lossy Data Compression, Lossy Video Compression) - Lossy Compression is a technique for shrinking file sizes by giving away some precision of detail. JPEG is a common example. By reducing the so-called quality of a picture when you save it, you can make the file size smaller. Many pictures can take substantial loss of fine detail before it becomes noticeable on a Web page. Most video compression technologies, such as MPEG, use a lossy technique. Both video and audio for DTV transmission can use lossy compression.

One way to compress data is to take out as much "redundant" (largely identical) data as possible. Video compression typically operates on square-shaped groups of neighboring pixels, often called macroblocks. These pixel groups, or blocks of pixels, are compared in the encoding process from one frame to the next and the video compression codec sends only the differences within those blocks. According to the article below, this works well if the video has no motion.