File compression is to perform some algorithm on the file that reduces it in size but the reverse of the algorithm will return it to its original form. In data files, the compression and decompression must be lossless which means that the data must be returned to its exact form. There are various methods to do this: some hardware implementations and some software. The most popular ones that are implemented in hardware usually use a Limpel-Ziv algorithm to look for repeating sequences over a set span of data (the run) and replace that with special identifying information. Compression does save space but may take extra time (latency).
Video and music data are typically already compressed. The compression rates are usually very high because of the data and the fact that a lossy compression algorithm is used. It can be lossy (meaning that all bits may not be decompressed exactly) because it won't be noticeable with video or music.
Zip files are the result of software compression. Another compression round on already compressed data will probably not yield any substantial gain.
Evaluator Group, Inc.
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This was first published in December 2001