Lossy compression makes a file dramatically smaller by throwing away information you weren't going to notice anyway. Every practical video codec — H.264, HEVC, AV1, VP9 — is lossy. The opposite, lossless compression, keeps every original bit but only manages to shrink video by a factor of 2–4× — not nearly enough for streaming, where compression ratios of 100–500× are routine.
What gets thrown away is carefully chosen. Codecs lean on three weaknesses of human vision: we don't notice subtle colour shifts as much as brightness shifts (so colour resolution is cut by chroma-subsampling); we don't perceive very small high-frequency details as accurately as low-frequency ones (so the encoder quantizes high-frequency dct coefficients more aggressively); and we don't track precise pixel values in busy or moving regions (so the encoder spends fewer bits there). The result: huge size savings that look essentially identical to a viewer.
The trade-off lives in how aggressive you set the loss. Push compression too far and visible artefacts appear — banding on gradients, "blocking" on flat areas, mosquito noise around text, smeared motion. Modern smart rate control modes (crf, capped CRF, per-title encoding) keep loss invisible most of the time by varying compression strength scene by scene. For business decisions: lossy is what makes video distribution economic, lossless is reserved for production masters and archival.
The book · Volume 1 of 7
Video Encoding: A Complete Guide to Video Compression — From Pixels and Color to H.264, HEVC, AV1, Quality Metrics, and AI
Lossy compression throws away what viewers are unlikely to notice, and every delivery codec works this way. Volume 1 explains lossy compression in detail: quantization and transforms, rate control, artefacts such as blocking and banding, and how quality metrics measure what lossy H.264, HEVC and AV1 encodes lose. Written by Nikolay Sapunov, CEO at Fora Soft.
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