MP3 (or, more precisely, MPEG-1/2 Audio Layer 3) is an audio compression algorithm capable of greatly reducing the amount of data required to reproduce audio, while sounding like a faithful reproduction of the original uncompressed audio to most listeners.
MPEG-1/2 Layer 2 encoding started in life as the Digital Audio Broadcast (DAB) project initiated by the Fraunhofer Society. This project was financed by the European Union as a part of the EUREKA research program where it was commonly known as EU-147.
EU-147 ran from 1987 to 1994. In 1991 there were two proposals available: Musicam (known as Layer II) and ASPEC (Adaptive Spectral Perceptual Entropy Coding) (with similarities to MP3). Musicam was chosen due to its simplicity and error resistance.
A working group around Karlheinz Brandenburg and Jürgen Herre took ideas from Musicam and ASPEC, added some of their own ideas, and created MP3, which was designed to achieve the same quality at 128 kbit/s as MP2 at 192 kbit/s.
Both algorithms were finalized in 1992 as part of MPEG-1, the first phase of work by MPEG, which resulted in the international standard ISO/International Electrotechnical Commission 11172-3, published in 1993. Further work on MPEG Audio was finalized in 1994 as part of the second phase, MPEG-2, which resulted in the international standard ISO/IEC 13818-3, originally published in 1995.
Compression efficiency of lossy data compression encoders is typically defined by the bitrate, because compression rate depends on bit depth and sampling rate of the input signal. Nevertheless there are often published compression rates which use the CD parameters as references (44.1 kHz, 2x16 bit). Sometimes also the DAT SP parameters are used (48 kHz, 2x16 bit). Compression ratio for this reference is higher, which demonstrates the problem of the term compression ratio for lossy encoders.
Karlheinz Brandenburg used a CD recording of Suzanne Vega's song "Tom's Diner" as his model for the mp3 compression algorithm. This song was chosen because of its softness and simplicity, making it easier to hear imperfections in the compression format during playbacks.
FhG publish on their official webpage the following compression ratios and data rates for MPEG-1 Layer 1, 2 and 3, intended for comparison:
* Layer 1: 384 kbit/s, compression 4:1
* Layer 2: 192...256 kbit/s, compression 6:1...8:1
* Layer 3: 112...128 kbit/s, compression 10:1...12:1
These values are probably overly optimistic (which is likely to be influenced by public relations, that is to say, they want to hype Layer 3) because the quality depends not only on the encoding file format, but also on the quality of the psycho acoustic algorithms used by the encoder. Typical layer 1 encoders use very simple psycho acoustics which result in a higher needed bitrate for transparent encoding.
* Layer 1 encoding at 384 kbit/s, even with these simple psychoacoustics, is better than Layer 2 at 192...256 kbit/s
* Layer 3 encoding at 112...128 kbit/s is worse than Layer 2 at 192...256 kbit/s.
That is to say, the assumed bitrates are not equivalent in quality and the qualities are not necessarily optimal (It is generally agreed that 112 to 128 kbit/s Layer 3 is not excellent sound) and therefore the comparison is probably not very reliable as an objective source.
