The term CODEC stems from the blend of the words Coder and Decoder.

Codec systems enable raw information to be transferred between locations through a medium/alternate process that does not necessarily support the raw information.

Codecs are used in all aspects of technology. An example of this is a Video Codec. The Coder takes the raw video content and converts the information into another format suitable for playback or use in the next part of the production process. That process could be storage/post production or transmission to home or both or something else. After the process, the content would be passed to a Decoder to obtain the original information format. 

Typically, when coding a piece of information, the information is compressed to make best use of next process. This potentially can be by removing redundant information. The decoder then decompresses this and re expands the information at the end of the process in a hopefully lossless way.

As one may imagine, some coding and compression systems are better than others and as each system makes slight adjustments to the original data, and so multiple codec working can slowly degrade the information.

A direct conversion from one codec to another is known as a transcode. It is almost impossible to avoid transcodes between the creation and the final delivery of the media to the end user.

Codec systems are being developed at a rapid pace and this results in there being a multitude of potential solutions for working in the field. Unfortunately, not all codecs are deemed suitable for HD workflows. Use of the wrong codec, and the need for multiple transcodes can result in a degradation of the picture quality.

The commissioning broadcasters issue a list accepted codecs within their Technical Requirements documentation (see DELIVER section).

For good results the aim should be for the codec/compression system used in the camera to be carried through the production process to the transmission system. If this is not directly possible, intermediate formats may be required e.g. due to storage or connectivity constrains etc.

Local source recording should be made in the correct, high quality format. Highly compressed proxy formats, which can be used for preview, or low resolution editing, can be used to work around sending huge files immediately to the post production facility, however this does rely on a conform of the edit prior to transmission to restore the image quality, from the original, high quality rushes.