Abstract: A receiver in an audio distribution system provides graceful degradation of audio quality as transmission quality decreases by dynamically adjusting the volume of audio output as a function of transmission quality. The receiver estimates the rate of transmission errors in a transmission link on which the audio signal is distributed by detecting errors in known information embedded in the audio signal. As the rate of transmission errors increases, the receiver increasingly attenuates the volume of the audio output. The receiver dynamically adjusts the volume relative to the rate of transmission errors applying a smoothing function to avoid disruptive rapid fluctuations in audio output volume.