A VOB file is normally known as a DVD Video Object file, and is one of the most common formats for storing video and audio streams on DVD discs. The VOB format also may denote a Vue d'Esprit object, which is a 3D model created for use within the application. A VOB file contains video streaming in MPEG-2 format and audio streaming in one of several formats.
VOB files are a container, which consist of 3 things. They consist of video, audio and subtitle streams. The video stream is in MPEG-2 format, the audio however can be in various forms such AC3 - which is the most common, MPEG-2 multichannel, MPEG-1 Layer 2 dual channel or PCM format. The reason AC3 is the most common is that it offers a good compromise between quality and bitrate.
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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.