I don ' t understand your analogy . Maybe , I just don ' t know enough about jpeg and PM . The major difference between AM and FM from a system designers perspective is this FM allows you to get a better signal at the cost of bandwidth , AM does not . Hence why we give FM such a wideband per channel , because that improves the signal . Doing the same with AM would eat up a large amount of power . FM is actually a really crappy method of encoding . Really horrible in efficiency . But early in radio , power was expensive and spectrum was cheap . FM was the natural solution . Now spectrum is expensive and power is relatively cheap , but we are stuck with legacy . Think of it like this , in 75 Mhz of bandwidth , a digital signal can get 150 Mbps of data transmitted .