HDMI ARC vs Digital Optical: Which is Better and Why?

HDMI ARC and Digital Optical are very different as far as what they can support.

Basically here's what each supports!
Digital Optical: 2 channels of uncompressed PCM audio or up to 5.1 channels of compressed audio. End of story. This is the max that digital optical is capable of supporting.

HDMI ARC:
All TVs: 2 channels of uncompressed PCM audio or up to 5.1 channels of compressed audio.
TVs made around or after 2018 may support up to 7.1 channels of compressed audio, including height or upward-firing channels.

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