There are many competing encoding algorithms for digital audio files; two of the most popular are the WMA and MP3 formats. Both formats are compatible with a wide range of devices and offer highly-customizable compression of audio files down to a small fraction of their original size.
The MP3 format, also known as MPEG-1 or MPEG-2 Audio Layer III, was developed by the Fraunhofer Institute and released in 1995. It allowed CD-quality audio files to be reduced to less than a tenth of their original size, which made them perfect for transferring over the Internet. As the popularity of MP3 files grew -- as well as the illegal trade of copyrighted MP3s -- other audio encoding standards emerged to compete with MP3s. These newer standards offered improved quality, smaller file sizes and the security of Digital Rights Management software designed to prevent copyright infringement. The Windows Media Audio format was one such competitor, introduced by Microsoft in 1999.
As the unofficial standard for digital music, MP3 files are compatible with nearly all recent audio software running on Windows, Linux, OS X and other operating systems. In addition, the MP3 format is also compatible with most digital music players, as well as many mobile phones, tablets, DVD players, Blu-ray players, set-top boxes, smart TVs and car stereos that support the playback of digital music. Thanks to official-licensing agreements or unofficial third-party implementations of the WMA format, standard WMA files without DRM protection are compatible with most audio software on Windows, OSX and Linux, as well as many recent digital music players and other consumer electronics. Some WMA files may not be compatible with older digital music players and electronics made before the wide adoption of WMA-compatible software. WMA files that are protected with DRM will play on any hardware or software that uses an officially-licensed decoder, but they may not be compatible with players that rely on third-party implementations of the format.
The perceived quality of a compressed audio file as compared to the original source material is highly subjective. By comparing multiple opinions however, double-blind studies have rated the quality of WMA and MP3-compressed files as similar to the source material at a bit rate of 128 Kbit/s. MP3 files tend to rate just a bit higher in some tests, but the difference is negligible. As the bit rate increases, the compression is reduced, creating larger file sizes and retaining more of the information from the original file. Common encoding rates are 128, 160, 192 and 256 Kbit/s. The maximum for both formats is 320 Kbit/s and both offer either fixed or variable bit rate encoding.
At lower bit rates, the file sizes of WMA and MP3 are similar. For example, at 64 Kbit/s, a five minute audio file saved in the WMA format is 2.6MB, while the same file saved as an MP3 is 2.4MB. At higher bitrates, however, the MP3 format results in smaller files. At 192 Kbit/s the WMA file is 10.4MB and the MP3 is 7.2MB. At 320 Kbit/s the WMA file grows to 20.8MB, while the MP3 is much smaller at 12.1MB -- 58 percent of the WMA file size.