When I first looked into this I was like wtf? too... but this is all to do with the data compression.Lossless data compression is a class of data compression algorithms that allows the exact original data to be reconstructed from the compression data. This is the opposite to lossy data compression, which allows an approximation of the original data to be reconstructed, in exchange for better compressions rates.
What's the advantages?
One advantage of the lossy methods over lossless methods is that in some cases the lossy method can be compressed smaller than its counterpart, importantly while still meeting the requirements of the application.Lossy methods are most often used by data are intended for human interpretation where the mind can fill in the blanks or see past minor errors. Ideally lossy compression is transparent or imperceptible, otherwise you would notice it sounded bad and not use it. If you do notice an anomaly it is called a compression artifacts.Audio can be compressed at 10:1 with imperceptible loss of quality. The compression rate in lossy compression is 5-6%, where as in lossless compression it is about 50-60% of the actual file.
List of Lossless formats (links to wikipedia)
Free Lossless Audio Codec – FLAC
Apple Lossless – ALAC (Apple Lossless Audio Codec)
apt-X – Lossless
Adaptive Transform Acoustic Coding – ATRAC
Audio Lossless Coding – also known as MPEG-4 ALS
MPEG-4 SLS – also known as HD-AAC
Direct Stream Transfer – DST
DTS-HD Master Audio Meridian Lossless Packing – MLP
Monkey's Audio – Monkey's Audio APE
OptimFROG RealPlayer – RealAudio Lossless
Shorten – SHN
TTA – True Audio Lossless
WavPack – WavPack lossless
WMA Lossless – Windows Media Lossless