Developed by the Signal Processing Group at Microsoft, the WMA file format is part of the Windows Media framework and was first released commercially in 1999, with support for playback of WMA encoded files as part of Windows Media Player. Creation of WMA files did not come until Windows Media Player version 7. The original codec was targeted as a direct competitor to the MP3 and RealAudio formats, and has achieved a broad level of adoption thanks to support for playback on numerous DVD players, Nokia mobile handsets and Playstation portable devices.
In almost all circumstances WMA files are part of the Advanced Systems Format (ASF) container, a proprietary container format developed by Microsoft for both digital video and digital audio. Every WMA file contains an audio track encoded in one of four mutually distinct codecs - WMA, WMA Voice, WMA Lossless or WMA Pro - WMA is the most commonly found of the four, but is a lossy codec, with the ability to encode audio signals sampled at up to 48 kHz. WMA Pro is an improved version, allowing sampling up to 96 kHz, but has achieved little hardware and software support. WMA Lossless is designed to compress audio signals with no loss of quality from the original source (up to 96 kHz) and is used in some Windows Mobile devices as well as the Logitech Squeezebox Touch. Finally, WMA Voice is a lossy codec optimized for low-bandwith voice playback applications, with mono sampling support up to 22.05 kHz - it is perhaps most well known for being used by the BBC World service for streaming Internet radio.
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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.