MP4 players work by reading a compressed video or audio file and playing its contents. The MP4 standard is for a container that can hold different types of audio and video information.
Digital audio and digital video are typically compressed to save space; there are a number of different standards that decode this information. Codecs are designed for specific compression types, and media players, including MP4 players, rely on codecs to read and decompress data. Many video players, including VLC and other popular players, can load video codecs to expand their capabilities.
MP4 files typically contain one of two different video compression standards, although they're capable of handling other types of video compression standards, including a number of legacy standards. They also support encoded audio; AAC is a popular format, but MP4 files can also use MP3 compression for the audio portion of files. Because of this, MP4 players need to have the right audio codecs in addition to the right video codecs to play files correctly.
Some of the most popular MP4 players are online. The MP4 container was designed to support video streaming, and the advanced codecs the container supports allow companies to stream high-quality video while using as little bandwidth as possible. YouTube, the largest video streaming site, accepts MP4 uploads and can stream video using the MP4 format.