Audio over IP is nothing more than audio that is being sent over the internet. The digital audio file is encapsulated in a packet and it’s data is sent over the web just like a picture or an email. The end user is usually using a similar system which decodes the packet and plays back the audio in near real time. You might use this technology every day using FaceTime or Skype.
Audio over IP networks (AOIP) are nothing new but we are finally starting to see some major improvements with these distribution mediums. The technology replaced aging ISDN networks which were used many years prior by studios and radio stations. The infrastructure usually consisted of multiple telephone lines to create a high bandwidth network. The cost for hardware and service was atrocious. Both systems are capable of providing high quality audio with very little latency. Depending on the codec and the system being used it possible to get near original quality of a singer in Boston played back in real time to an engineer in Mumbai. Think of a very high qaulity phone call suitable for recording or broadcasting.
AOIP and VOIP technologies are steadily growing more reliable so it’s only a matter of time before manufactures start pushing these technologies as the standard to consumer markets. The major factors of audio over IP is quality and latency. Keep in mind that AOIP when used in live events, broadcast, and studio is far different than listening to your favorite artist over Spotify. Live engineers depend on near zero latency and high bandwidth which means buffering is not an option. Even when used in video conferencing it is incredibly annoying when the call is dropping in and out or there is a huge delay.
We’re still a long ways away from determining one standard that we will see as default in hardware including mixers, cameras, phones, conferencing systems and studios. The industry is still currenly dominated by a proprietary market where hardware manufactures usually require their technology be used on both ends of the transaction.