Is this partially what happens when you "zip" a file? I know more about lossy compression, like taking a high resolution photo and turning it into a .jpg and shrinking the file size which usually only affects quality when viewed at larger sizes. Or the ever popular mp3 which I believe cuts out certain ends of the spectrum to create smaller file sizes.
Great article :) It's fascinating how algorithms can do so many helpful tasks!
RE: Data compression - algorithms that help you to save disk space