Remember back in the 1980s when you purchased your first CD?

Whether it was Billy Idol or The Psychedelic Furs, imagine if you had gone home and placed the Sony-manufactured CD in your Panasonic CD player, only to find out that it didn’t work.

Or, what if that CD from Virgin Records only had half the sound quality as a CD bought from Best Buy?

Believe it or not, this is exactly the current digital music environment in which we live.

To navigate a digital world without standards, today’s audiophiles must gain some digital music knowledge to optimize their listening experience as they convert their CDs to digital music.

To understand where we’re headed with today’s digital music, it’s key to understand where we’ve been. All digital music formats are based on the principles discovered by German researchers at the prestigious Fraunhofer Institute.

In 1987, the Institute began researching high quality digital audio compression. They discovered that by understanding how humans hear music, a particular song could be stripped of excess sounds that were inaudible.

The obvious first choice was to remove frequencies too high or too low for the human ear to perceive. However, the more interesting breakthrough was to eliminate “masked” sounds—those sounds that are hidden behind louder sounds.

During a Jimi Hendrix guitar solo, for instance, drummer Mitch Mitchell may have been producing a lot of noise of his own, but Jimi’s solo masks that sound. Similarly, in a compressed digital song, the hidden pieces of Mitchell’s drumming are removed completely, leaving the illusion of a full musical performance, but reducing the amount of information in the digital file.

The effect is analogous to a Hollywood set in a 1950s spaghetti western, where the buildings on main street appear real to the audience but are facades.

Here are seven facts about digital music that are critical whether you’re planning to install a $100,000 multi-room audio solution or simply enjoying music on your iPod in your car or at the gym.

There Are Many Flavors of Digital Music: Learn Your Formats

The end result of the Fraunhofer Institute’s digital audio research was the MP3, or Motion Pictures Expert Group Audio Layer III.

This MP3 standard for audio compression first gained a foothold in college dorm rooms in the late 1990s. In 1999, 18-year-old computer geeks weren’t too concerned with sound quality, but now they’ve grown up and so has digital music.

Many more digital audio formats have since been introduced, including these more popular formats:

• AAC (Advanced Audio Coding) Developed by Apple and the standard for Apple iTunes.
• WMA (Windows Media Audio) Developed by Microsoft with encoding support built into Windows XP.
• AIFF (Audio Interchange File Format) A Professional Apple file format for storing audio files. AIFF files are high quality, uncompressed, audio files that were co-developed by Apple based on Electronic Arts Interchange File Format
• FLAC (Free Lossless Audio Codec) An “open-source” royalty-free audio format that minimizes compression (2:1 ratio) to maintain CD audio quality
• ALAC (Apple Lossless Audio Encoder) A CODEC developed by Apple to preserve CD quality at a lossless data compression ration of 2:1.

This alphabet soup of CODECs can be broken down into two simple subsets: Lossless (ALAC, FLAC, AIFF, WMA Lossless) and Lossy (MP3, AAC, WMA).

The main advantage of Lossless CODECs is that the file size is reduced by up to 60 percent without sacrificing the CD’s audio integrity. This, however, still requires a sizable amount of computer storage—roughly 200-400 megabytes per CD.

As the cost of storage continues to fall, Lossless CODECs provide an ideal way to create a master archive of your CD collection, which can later be burned onto blank CDs or played through high-end digital music servers with little to no audio loss.