Lossy compression is a method of reducing the size of a file by permanently eliminating some data. This technique is commonly used for audio, video, and image files, where a perfect reproduction is not necessary. For example, formats like JPEG for images and MP3 for audio utilize lossy compression to decrease file size while maintaining acceptable quality for most users. The main advantage of lossy compression is that it significantly reduces storage space and bandwidth usage, making it easier to share and stream content. However, the trade-off is that some quality is lost, which may be noticeable in certain situations, especially if the compression is too aggressive.