FLAC Vs. AAC
FLAC may sound better than AAC. But it’s not smaller by any means. In fact, when compared with 128kbps AAC files, the same songs in FLAC are over four times larger. Apple had to pick a format that not only sounds decent, but provides enough space reduction to allow a fair amount of music to be stored on the iPod. Unfortunately, FLAC is not that compact. So, Apple made a trade-off choice between the best sound and the most compact and in my opinion, AAC was a good choice because even though it offers smaller file sizes, it still sounds quite good — nearly as good as FLAC.
Also, AAC, or at least AAC contained in MP4 files is more proprietary than FLAC, yes. This enabled Apple to better enforce DRM, which is something the record companies insisted on before they’d permit Apple to sell their music in the iTunes store.
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Tom Hesley