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Lyrical dance is a studio-based dance style that uses a combination of classical dance techniques from jazz and ballet to tell a story through movement. With jazz and ballet, technique alone can provide a good performance but in lyrical dance expressing emotion is emphasized just as much as technique.
I feel that in usage, lyrical is the 'soft jazz' that is always done to sad, angsty, nostalgic or sweet songs. In usage, 'contemporary' usually means 'modern jazz' or 'new jazz' that is done to more of a variety of music.