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The term "audio compression", meaning audio level compression is used in the sound recording and live sound reinforcement fields. In this context, it refers to a process whereby the dynamic range of an audio signal is reduced.

An audio level compressor reduces the dynamic range of an audio signal by using a variable gain amplifier to reduce the gain of the signal if it passes a set threshold. The amount of gain reduction is usually determined by a ratio control. That is, with a ratio of 4:1, if the input level is 4 dB over the threshold, the gain will be reduced so that the output level will only be 1dB over the threshold. This is typically carried out in analog systems by using a voltage controlled amplifier which has its gain reduced as the power of the input signal increases.

Compressors usually have controls to set how fast the compressor responds to changes in input level, known as attack, and how quickly the compressor returns to no gain reduction once the input level is below the threshold, known as release. The attack of a compressor is always set to at least as slow as the lowest frequency signal in the track, and usually a few times slower. Because the compressor is reducing the gain (or level) of the signal, the ability to add a fixed amount of gain at the output is provided so that an optimum level can be used.

Compression is commonly used in television commercials to boost the perceived volume of the sound track. Television broadcasters have limits on the instantaneous peak volume of the audio track in a broadcast rather than its root mean square volume over the entire 30 second commercial segment. By applying compression followed by gain compensation the overall volume of the track is increased without increasing its peak volume and the sound is perceived as louder.

Some compressors implement side-chaining. This feature uses the dynamic level of another input to control the compression level of the signal. This is used by disc jockeys to lower the music volume automatically when speaking, for example (known as ducking). Another use is in music production, to maintain a loud bass track, while still keeping the bass 'out of the way' of the bass drum when the drum hits.

A different, non-linear type of compressor is used to reduce the dynamic range of a signal for transmission, to be expanded afterwards. This reduces the effects of a channel with limited dynamic range. See Companding.

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