MP3 is a digital music format which allows CD tracks to be reduced to around a tenth of their normal size without a significant loss of quality. MP3 gets rid of a lot of the information recorded in a song that our ears are not able to hear and then uses complex algorithms to reduce the file size. This then enables you to get hundreds of songs on to a CD and it also has opened up a new market over the internet - the download market as download times have been significantly reduced.
The MP3 format is a lossy format. That means that an MP3 file does not contain 100% of the original audio information. Instead, MP3 files use perceptual coding. In other words, that means it removes the information that your ear doesn't notice thereby making the file smaller. The reason lossy formats are used over RAW is that RAW audio files are too large to travel over the internet at any great speed. By using lossy formats it enables even dial up users to download mp3 files at a reasonable speed. RAW file formats generally require 176,000 bytes per second compared to a lossy format which requires 17,600. The difference is massive and so are the download times.
Free Lossless Audio Codec, or FLAC for short, is an audio compression technique. It is a lossless compression type meaning that the compression takes place without data being discarded. FLAC is an open source codec. FLAC is a format that is recommended to those backing up a CD collection because the sound quality will remain high, whereas MP3 compression will result in a deterioration compared to the original.
Using FLAC to compress an audio file to approximately 50% of its original size. The main benefits of a FLAC file in addition to it being lossless is that it can be used for streaming, and decoding is fast, allowing for real time decoding to take place. A FLAC file also contains several data integrity checks in the header file. The metadata associated with the audio has been future proofed also to allow new fields to be defined without impacting existing decoders.