Just for a bit of explanation. Codec stands for Code/decode. It's the same shorthand as modem, which stands for modulate/demodulate.
With the original modems which communicated on regular telephone lines, the sending modem had to turn the digital data into waveform modulation to send on a voice line. The receiving modem demodulated the waveform back into digital.
Codec is kind of the same idea. Take a DVD video. Everything on it is compressed. You take your uncompressed input video and encode it for the disk. Your playback device then decodes the compressed video to play it.