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 4dB over the threshold, the gain will be reduced so that the output level will only be 1dB over the threshold.
Compressors usually have controls to set how fast the compressor respondes 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. Also, 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.
In telecommunication, this operation and its reverse are together known as companding (for compressing and expanding) so called because the dynamic range of signals is compressed before transmission and is expanded to the original value at the receiver.
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.
The use of companding allows signals with a large dynamic range to be transmitted over facilities that have a smaller dynamic range capability. Companding reduces the noise and crosstalk levels at the receiver.