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what is a codec?
A codec is any technology used for compressing and decompressing data. The word 'codec' can be looked at as an abbreviation for both 'compressor-decompressor' and 'coder-decoder'.
In terms of the graphic industry, a codec is a software component used to translate video and/or audio between its uncompressed form and the compressed form in which it is stored. Most codecs, like Micrcosom, are not tied to a resolutoion though occasionally some proprietary hardware codecs are. There are 'lossy' codecs and 'lossless' codecs.

about 'lossy' codecs
Most codecs are 'lossy'. There's a loss of detail between generations. This means that every time you save your footage, you lose quality.
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Lossy codecs achieve great compression ratios at the cost of image fidelity.
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Lossy codecs average out pixels to get rid of redundant data. Unfortunately, you can’t get rid of much data before you start seeing artifacts in the image.
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Examples of lossy codecs are Sorenson Video, DV, and Cinepak.

about 'lossless' codecs
In 'lossless' codecs, every single pixel that goes in comes back out. Relative to other lossless codecs, Microcosm files are small. They are still not small though. They are large compared to a lossy codec like DV codec.
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When the image is compressed and then decompressed, nothing will be lost. Every pixel of the decompressed image will match the original image.
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Because very little image quality is sacrificed, the downside to lossless behavior is that the files are large.
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An example of lossy codecs is the Animation codec.

all options lead to Microcosm
All codecs are useful for something. Their usefulness means that they always have a tradeoff.
For instance, the Sorenson codec is great for web video but looks horrible for TV production. DV file format looks OK on a TV screen and it's smaller than Microcosm. But DV codec is bad for transfering footage between applications becuase it loses quality and detail.
A popular intermediate lossless QuickTime codec is the Animation codec set to Best Quality. Animation produces very low compression ratios, especially on noisy film or video, coming in very close to uncompressed. However, Animation file sizes are very large.
Microcosm truly mixes the best of the lossy and lossless worlds. It saves out small file formats, like a lossy codec. But it maintains image quality, like a lossless codec.

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