Subtitles are generally text translations of the source language of the video that show up on screen. They allow videos to be translated into any language that has an available script, called character set, and thus can potentially have a global viewership.
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Subtitles come in a few file formats and can be attached to video in a few different ways. This variety can give subtitled video a greater flexibility but at the same time less standardization can also create headaches. However, the basic construction of a subtitle is a block of text linked to a time code that matches a certain point of time within the video. During video playback, when that point happens in the video, the subtitle also appears.Captions are another type of text overlay for video content. Captions are used mainly for accessibility purposes - for deaf or hard of hearing people. Captioning is used to describe a wider range of information than subtitles, for example descriptions of non-spoken events such as noise, music and dramatic events. See this article by Joe Clark for more information about online captioning - http://joeclark.org/access/captioning/bpoc/ST.html