Adaptive Transform Acoustic Coding (ATRAC) is a family of proprietary audio compression algorithms developed by Sony.

ATRAC allowed a relatively small disc like MiniDisc to have the same running time as CD while storing audio information with minimal perceptible loss in quality.

This was partly due to low adoption of the format, with a source claiming that 90% of European Walkman users did not use ATRAC.

[5] Until 1 October 2012, ATRAC was the only codec available to download music from mora until they transitioned to a DRM free model and began offering FLAC files the next year.

This is reflected in the design of the ATRAC codecs, which emphasize processing smaller groups of samples at a time to save memory at the cost of compression efficiency and additional multiplies.

ATRAC1 was first used in Sony's own theater format SDDS system in the 1990s, and in this context is a direct competitor to Dolby Digital (AC3) and DTS.

Two stacked quadrature mirror filters split the signal into 3 parts: Full stereo (i.e., independent channel) encoding with a data rate of 292 kbit/s.

Sony claims the major advantage of ATRAC3 is its coding efficiency, which was tuned for portable DSP which provides less computing power and battery life.

However, in an independent double-blind test (2004/05) without format encoding parameters reference against Ogg Vorbis, AAC, and LAME VBR MP3, ATRAC3 came last.

[11] This reduces the data rate to 66 kbit/s (half that of LP2), partly by using joint stereo coding and a lowpass filter around 13.5 kHz.

The PlayStation 3 video game Race Driver: Grid uses 224 simultaneous streams of ATRAC3 compressed audio, with between one and eight channels per stream at sample rates between 24 and 48 kHz, each filtered using 512 frequency bands of adaptive equalisation, routed via six reverb units running on the same SPU co-processor (one of eight on the PS3's Cell chip), alongside 7.1 channel hybrid third-order Ambisonic mixing.

Prior to MDCT coding, Generalized Harmonic Analysis (GHA) is used to extract tonal components, an improved version of the process used in ATRAC3.

In a test conducted by an independent firm, but financed by Sony, it was concluded that ATRAC3plus at 64 kbit/s is equal in subjective sound quality to an obsolete MP3 encoder at 128 kbit/s.

AAL's use of a "core" (lossy) and "residual" (correction) stream is similar to the idea behind Opus, MPEG-4 SLS, DTS-HD Master Audio, Dolby TrueHD and Ogg Vorbis bitrate peeling.

WavPack hybrid mode and OptimFROG DualStream are in the same category, but store the correction stream in a separate file.