Files sometimes need to be compressed to make the file size smaller. There are two ways in which techniques when it comes to compressing files, Lossless and Lossy.
Lossless Compressions
Lossless compressions are generally reducing the file by encoding the file however not loosing anything in the process. Lossless is like Zip filing, Zip files is an example of a lossless compression. When unzipped the file becomes reconstructed.
Lossy Compressions
Unlike lossless compression, lossy compression can cut the file size down much more; up to 3 quarters of the original file size can be compressed. However information is lost in the process.
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