A container is defined by Wikipedia as "a meta-file format whose specification describes how data and meta-data is stored (not coded)". Basically, the container format determines how one or multiple compressed audio and/or video stream(s) can be wrapped into a single file; it defines the file structure, a mechanism for synchronized playback, support for additional information or meta-data and more.
On the other hand, a codec - shorthand for coder/decoder - is an algorithm used to compress (for storage and transmission) and/or decompress (for playback or editing) a multimedia data stream in order to reduce the amount of bytes required to store or send such a stream. After compression, the resulting data stream(s) are encapsulated (together) in a container format that supports the codec(s).
Different codecs are designed for specific hardware or software implementations, or to emphasize certain aspects of the media to be encoded. Codecs also tend to have a limited lifetime, being replaced by faster and more powerful algorithms. Currently - at the beginning of 2010 - the MPEG-4 standards (part 3, AAC for audio / part 10, H.264 for video) have become the de-facto industry standard for online multimedia.
The combination of a H.264 video stream and an AAC audio stream can be stored in different kinds of containers:
Some other common container formats, at the time of writing, include:
The Rambla Transcoding Service provides most of these container/codec combinations as default transcoding formats, but also allows customers to create their own ones (by creating custom format profiles). Both the default and custom format profiles can also be used through the Rambla Control Panel's transcoding wizard.
For more information about containers and codecs, see also:
Update: the WebM project
On May 9, 2010 Google released WebM as an open and royalty-free video compression format for the web. The WebM project defines a container format based on a subset of the Matroska media container, which is designed to hold VP8 video and Vorbis audio streams. Even though H.264 is currently still very dominant, WebM is expected to gradually gain market share, which may result in a two-codec world for the coming years.
For more info, see the WebM vs H.264 debate from our State of Play series.
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