What exactly is ATRAC?
ATRAC (Adaptive Transform Acoustic Coding) divides the 16 bit 44.1 KHz digital signal into 52 sub-bands in the frequency domain. The sub-bands in the low frequencies are finer than the ones in the high frequency range. A psycho-acoustic transfer function that takes advantage of the masking effect and the absolute hearing threshold of man then removes enough information to reduce the data stream to 1/5th of the original size.