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Software or hardware used to encode a data signal or data stream (including a voice or video stream) for easy transmission and then decoding at the receiving end of the signal in the form most appropriate for listening or viewing.

Merriam-Webster Online Dictionary
codec (abbreviation)
Codec (Wikipedia)

A codec is a device or computer program which encodes or decodes a digital data stream or signal. Codec is a portmanteau of coder-decoder.

A coder encodes a data stream or a signal for transmission or storage, possibly in encrypted form, and the decoder function reverses the encoding for playback or editing. Codecs are used in videoconferencing, streaming media, and video editing applications.

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