Music frequently exhibits regular repeating structure because of musical beats, vamps, and rhythms. In this thesis, an audio compression algorithm that takes advantage of this structure is described. After providing some background, a simplified implementation of a perceptual audio compression algorithm is described and then modified to explore this idea. The newly proposed algorithm is evaluated using a publicly available dataset. The results show that the proposed algorithm can improve the compression ratio while retaining audio quality on rhythmic mixtures and background music. Better audio compression has potential applications in virtual music performance.