Codecs & Compression
Lossy Compression
Compression that permanently discards some detail the human eye is less likely to notice, in exchange for dramatically smaller file sizes.
Virtually all streaming video uses lossy compression rather than lossless (like a ZIP file), since lossless methods achieve far smaller size reductions — impractical for real-time delivery over typical home connections. Modern codecs are designed to minimize visible quality loss at reasonable bitrates.