Lossy

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Does Lossy Encoding Preserve Surround Information?

Depending on the encoder and settings, degradation of surround imaging may happen. Use higher bitrate. Mid/Side stereo of LAME or AAC does not destroy surround information. Also MPC preserves surround information with standard settings reasonably well. The lower the bitrate, the worse you can expect the surround imaging become.

List of common lossless formats