Sigma delta modulation is a popular technique for high-resolution analog-to-digital conversion and digital-to-analog-conversion. It has been considered as a new format for recording and storage of audio signals. To reduce the storage capacity, a lossless compression scheme can be applied. However, this scheme offers less than 3:1 compression. This may not be sufficient for storage on media such as a Digital Versatile Disk (DVD). We propose a scheme based on a technique known as bit-grouping. Errors are introduced in the compression, but they are confined to frequencies outside the audible range. Our studies indicate that bit-grouping allows one to achieve greater than 4:1 compression.
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