A lossy compression method is one where compressing data and then decompressing it retrieves data that may well be different from the original, but is close enough to be useful in some way. Lossy compression is most commonly used to compress multimedia data (audio, video, still images), especially in applications such as streaming media and internet telephony. On the other hand lossless compression is preferred for text and data files, such as bank records, text articles, etc. Most lossy compression formats suffer from generation loss: repeatedly compressing and decompressing the file will cause it to progressively lose quality. This is in contrast with lossless data compression.
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