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The utility of SBC is perhaps best illustrated with a specific example. When used for audio compression, SBC exploits [[auditory masking]] in the [[auditory system]]. Human ears are normally sensitive to a wide range of frequencies, but when a sufficiently loud signal is present at one frequency, the ear will not hear weaker signals at nearby frequencies. We say that the louder signal masks the softer ones.
The basic idea of SBC is to enable a data reduction by discarding information about frequencies which are masked. The result differs from the original signal, but if the discarded information is chosen carefully, the difference will not be noticeable, or more importantly, objectionable.
==Encoding audio signals==
The simplest way to digitally encode audio signals is [[pulse-code modulation]] (PCM), which is used on [[audio CDs]], [[Digital Audio Tape|DAT]] recordings, and so on. Digitization transforms continuous signals into discrete ones by sampling a signal's amplitude at uniform intervals and [[rounding]] to the nearest value representable with the available [[Audio bit depth|number of bits]]. This process is fundamentally inexact, and involves two errors: ''[[discretization error]],'' from sampling at intervals, and ''[[quantization error]],'' from rounding.
The more bits used to represent each sample, the finer the granularity in the digital representation, and thus the smaller the quantization error. Such ''quantization errors'' may be thought of as a type of noise, because they are effectively the difference between the original source and its binary representation. With PCM,
More clever ways of digitizing an audio signal can reduce that waste by exploiting known characteristics of the auditory system. A classic method is nonlinear PCM, such as [[mu-law]] encoding (named after a perceptual curve in auditory perception research). Small signals are digitized with finer granularity than are large ones; the effect is to add noise that is proportional to the signal strength. Sun's [[Au file format]] for sound is a popular example of mu-law encoding. Using 8-bit mu-law encoding would cut the per-channel bitrate of CD audio down to about 350 kbit/s, or about half the standard rate. Because this simple method only minimally exploits masking effects, it produces results that are often audibly poorer than the original.
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