Obligatory post of this classic example in audio:
And an homage using the lossy compression YouTube applies when you upload a video:
I like this kind of thing a lot and I think it would be really interesting to play with digital loops as well as physical media. Like a loop with a controlled probability of introducing a bit error somewhere each time the loop repeats, or some other artifact. In digital systems I suppose you have to simulate the exact parameters of the kind of degradation you want, studying how to model sandpapered / baked magnetic tape (or heated vinyl? or weird artifacts you can probably introduce by messing with an oil can delay?) seems quite interesting.